Slide 1: Gamma 2020 Interim Results
Gamma 2020 Interim Results Andrew Taylor, CEO Andrew Belshaw, CFO Working smarter, together.
Slide 2: Interim Results 2020 Agenda
Gamma 2020 Interim results Interim 01. Performance highlights and business update Andrew Taylor Results 2020 02. 2020 First Half Financial Review 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: Performance highlights and business update
Gamma 2020 Interim results Performance highlights and business update
Slide 4: 2020 – H1 Highlights
Gamma 2020 Interim results 2020 – H1 Highlights Strong financial performance in the first half Revenue £177.3m (+12% against 2019; organic growth was +9%) Adj EBITDA £36.1m (+19%) Adjusted EPS 23.5p (+22%) • All business units performed well with excellent levels of execution and strong channel and
Slide 5: Product Performance
Product Performance
Slide 6: H1 2020 - Product Summary - UCaaS UK & Europe
Gamma 2020 results H1 2020 - Product Summary - UCaaS UK & Europe Product Unit growth in H1 2020 Comments Cloud PBX UK: 522k to 560k seats (+7.3%) • Strong overall net organic growth of UK Cloud PBX seats (with low Pre-COVID cancellation levels) 25k+ Collaborate seats • In line with overall market gr
Slide 7: H1 2020 - Product Summary – Connectivity UK
Gamma 2020 Interim results H1 2020 - Product Summary – Connectivity UK Product Unit growth in H1 2020 Comments Business Broadband 111k to 114k (+3%) • Positive growth in a mature market – small but growing market share of 4% • Ability to install new circuits was severely impacted by the COVID-19 loc
Slide 8: 2020 H1 Business Unit Performance
2020 H1 Business Unit Performance
Slide 9: 2020 H1 Indirect Channel Summary
Gamma 2020 Interim results Indirect Channel revenue 2020 H1 Indirect Channel Summary £119.5m • 67% of Group revenues: £119.5m (2019: £110.9m) and 8% organic growth • Very strong partner resilience throughout H1 with virtually all partners continuing to trade throughout the COVID-19 crisis - Provided
Slide 10: 2020 H1 Direct Channel Summary
Gamma 2020 Interim results Direct Channel revenue 2020 H1 Direct Channel Summary £47.2m • 27% of Group Revenue: £47.2m (2019: £40.0m) and 15% organic growth • Enterprise grew 42% (38% organic) during the period • Exactive integration and overall business performance is going well, winning key contra
Slide 11: 2020 H1 Overseas Summary
Gamma 2020 Interim results Overseas revenue 2020 H1 Overseas Summary £10.6m • 6% of Group revenue: £10.6m • Our businesses in the Netherlands and Spain have performed well during difficult COVID-19 market conditions - The integration of both businesses continues to go well and are performing to plan
Slide 12: 2020 H1 Financial Review
2020 H1 Financial Review
Slide 13: 2020 H1 Financial Highlights
Gamma 2020 Interim results 2020 H1 Financial Highlights • Strong growth – Revenue up 12% to £177.3m (organic growth of 9%) • Adjusted EBITDA up 19% to £36.1m • Adjusted EPS up 22% to 23.5p • Cash generated by operations up 18% to £32.2m • Dividend up 11% to 3.9p • Cash balance £42.5m as at 30 June (
Slide 14: Income Statement
Gamma 2020 interim results Income Statement Six months ended 30 June 30 June Year ended 31 December Half on half Growth 2020 2019 2019 • Organic revenue growth of 9% Revenue Cost of sales 177.3 (84.2) 158.2 (80.1) 328.9 (162.4) 12.1% Gross profit 93.1 78.1 166.5 19.2% • Overall “COVID effect” has be
Slide 15: Indirect Business
Gamma 2020 interim results Revenue (£m) 140.0 Indirect Business 120.0 100.0 • Underlying recurring growth business increasing led 80.0 by SIP and Cloud PBX – installs down in Q2 due to Growth 60.0 Traditional COVID 40.0 • Traditional business static 20.0 • COVID effect – 0.0 H1 2018 H2 2018 H1 2019
Slide 16: Direct Business
Gamma 2020 interim results Revenue (£m) 50.0 45.0 Direct Business 40.0 35.0 30.0 • Direct business driven by Enterprise Solutions 25.0 • Public Sector growth masked by one off low margin 20.0 15.0 sale in H1 2019 10.0 5.0 • Mid-market static 0.0 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 • COVID effect
Slide 17: Overseas
Gamma 2020 Interim results Revenue (£m) 12.0 Overseas 10.0 • First half consists of Netherlands business and Spain 8.0 from 9 April 6.0 • HFO in Germany acquired on 1 July and gnTel in 4.0 Netherlands acquired on 17 July 2.0 • Organic revenue growth from the Netherlands 0.0 business of 5% H1 2019 H2
Slide 18: Overheads
Gamma 2020 interim results Overheads 2020 2020 2019 2019 Growth • “Cash overheads” increased by 20% to £55.9m £m £m £m £m Expenses included within cash generated from operations • In line with H2 2019 run rate – H1 2020 growth - UK Indirect Business 35.7 30.9 15.5% negligible - UK Direct Business 11
Slide 19: Balance Sheet and Cashflow
Gamma 2020 interim results Balance Sheet as at 30 June 30 June 31 Dec Balance Sheet and Cashflow (£m) 2020 2019 2019 Non-current assets (incl. PPE) 137.7 90.3 98.9 Receivables and 97.2 85.8 85.6 inventories • Strong cash reserves Cash 42.5 44.8 53.9 Current assets 139.7 130.6 139.5 • Cash conversion
Slide 20: Gamma 2023 Strategic Plan update
Gamma 2020 Interim results Gamma 2023 Strategic Plan update
Slide 21: Gamma 2023 Key Strategic Priorities
Strategic Plan Update Gamma 2023 Key Strategic Priorities Evolve our strong cloud telephony position into the UCaaS market Build on our Fixed and Mobile Telecom strength to differentiate our proposition from pure OTT’s Expand to Europe to gain continued growth and scale Continue to build on our digi
Slide 22: Evolve our strong cloud telephony position into the UCaaS market
Strategic Plan Update • Good progress in the development of our UCaaS suite for SME’s Evolve our strong - Acquired Telsis and developing a fully integrated cloud contact centre cloud telephony platform – going well and to plan for launch - Strengthened our UCaaS product development and marketing cap
Slide 23: Build on our Fixed and Mobile Strength to differentiate our proposition
Strategic Plan Update Strong network and Data Access capabilities: • Clear strategic direction as an aggregator – enabling us to offer best in class service Build on our Fixed and be more price competitive • Delivering a broader and stronger data product portfolio in 2019/20 - and Mobile Strength la
Slide 24: Expand to Europe to gain continued growth and scale
Strategic Plan Update • We are executing very well against our strategic plan: Expand to Europe - Acquisitions have provided a strong market position in Spain (Voz Telecom), Germany (HFO) and we augmented our business in the Netherlands (gnTel) to gain continued - Post acquisition of gnTel we will h
Slide 25: Continue to build on our digital capabilities
Strategic Plan Update • Continued investment in our digital platform capabilities which is a key strategic tool in supporting our direct customers in the UK Continue to build • Streamlining and automating all pre-sales, sales, customer service and OSS on our digital & BSS systems and processes capab
Slide 26: Business outlook
Gamma 2020 Interim results Business outlook • Gamma has a robust business model with very good (+90%) recurring revenue & margin, and therefore good visibility of our numbers through H2 2020 and beyond • Positive long-term UCaaS market outlook, with the future adoption of cloud services forecast to
Slide 27: Q & A
Gamma 2020 Interim results Q &A
Slide 28: Thank you.
Thank you. Working smarter, together.