Cordiant Digital Infrastructure Limited · LSE:CORD
Cordiant Digital Infrastructure — H1 FY2024 Earnings Presentation
40 slides from Cordiant Digital Infrastructure's earnings presentation, November 2023
Slide 1: Interim Results Presentation
Cordiant Digital Infrastructure Limited Interim Results Presentation For the six months to 30 September 2023 November 2023
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 document has been issued by and is the sole responsibility of Cordiant Digital Infrastructure Limited (CORD). This document contains in
Slide 3: Agenda – Contents and speakers
Agenda – Contents Agenda – speakers Steven Marshall Chairman of Cordiant Digital HIGHLIGHTS – page 4 Infrastructure Management FINANCIALS – page 7 Benn Mikula PORTFOLIO UPDATE – page 14 CEO, Cordiant Capital MARKET CONTEXT & PIPELINE – page 22 ESG & IMPACT – page 26 Mark Tiner Chief Financial Office
Slide 4: Highlights – Solid performance despite discount rate increase and FX headwinds
Highlights – Solid performance despite discount rate increase and FX headwinds CORD is an operationally focused, specialist digital infrastructure investor 1.1% Total return for the period on ex-dividend opening NAV 112.7p per share CORD applies a Core Plus investment NAV per share strategy, by inve
Slide 5: Highlights – Diversified portfolio assembled
Highlights – Diversified portfolio1 assembled £795 million equity raised and deployed. €200 million Eurobond drawn. A portfolio of diversified platforms assembled, with £207 million of total liquidity available Towers, data centres, fibre and internet of things (IoT) Towers, fibre and IoT New York i
Slide 6: Highlights – Solid results underpinned by strong operating performance
Highlights – Solid results underpinned by strong operating performance Solid financial results – Dividend fully covered 1.1% 4.0p 1.2x Total return for 112.7p 10.7% 5.5% 10.2x per share annual dividend cover the period on 6 month 6 month EBITDA paid for dividend based on AFFO, NAV per share ex-divid
Slide 7: Financials
Financials Cordiant Digital Infrastructure Limited 7
Slide 8: Financials – H1 2023 NAV bridge
Financials – H1 2023 NAV bridge Figures in £m, unless otherwise stated …including an 18 basis point increase in portfolio average discount rate since 31 March 2023, to 9.8% as of 30 September 2023 NAV progression for six months to 30 September 2023 960 Value movement breakdown FX movement breakdown
Slide 9: Financials – H1 2023 value bridges
Financials – H1 2023 value bridges Figures in £m, unless otherwise stated Value bridge Value bridge 500 450 3.6 35.1 31.8 1.3 400 ( 3.2 ) 461.2 - 450 389.1 6.6 ( 20.1 ) 388.6 ( 23.4 ) 429.0 350 400 300 305.9 350 250 353.0 200 Cost Opening Capitalised Effect of Change in Other value Foreign Closing v
Slide 10: Financials – Hudson value bridge, dividend
Financials – Hudson value bridge, dividend Figures in £m, unless otherwise stated Dividend ahead of IPO schedule Value bridge Dividend per share 65 2.9 60 - 4.0p 4.0p 4.0p 55 57.0 55.8 3.5p 0.3 3.0p 3.0p 50 ( 9.2 ) paid 48.9 ( 2.1 ) paid 45 2.0p 40 1.0p paid1 35 30 Cost Opening value Further Effect
Slide 11: Financials – Portfolio debt facilities
Financials – Portfolio debt facilities Strong liquidity position with significant dry powder Conservative debt structure1 • Fund level facility: the Eurobond facility of €200 million is now fully drawn down, no annual • Conservative long-term portfolio gearing2 of 38% clean down requirement, repayab
Slide 12: Financials – Portfolio revenue analysis
Financials – Portfolio revenue analysis Pro forma including Speed Fibre Proportion of portfolio revenue with Revenue diversified across three Highly contracted revenue base1 inflation-linked escalators1 main subsectors2 Revenue from contracts likely Data centres and cloud to renew and new business N
Slide 13: Broadcast will continue to be an important service for decades to come
Broadcast will continue to be an important service for decades to come Current technological advantages promoting continued Strong tailwinds supporting the future of broadcast with new uses relevance and longevity that add value to society and support cash flow generation • Very efficient in the use
Slide 14: Portfolio update
Portfolio update Cordiant Digital Infrastructure Limited 14
Slide 15: Portfolio update – Emitel
Portfolio update – Emitel Emitel investment highlights Emitel is the #1 provider of broadcast infrastructure in Poland and is a strong independent mobile infrastructure operator, benefiting from Stable and predictable 1 revenues linked to inflation long-term, inflation-linked contracts with a strong
Slide 16: Portfolio update – Emitel (cont.)
Portfolio update – Emitel (cont.) KEY DRIVERS % OF 2022 REVENUE2 1 TV broadcasting • Recurring revenues from blue chip clients for distribution of their channels on Emitel’s MUXes 60% • Driven by bandwidth used / # of total MUXes slots / # of emissions encoded (coverage) Radio 2 broadcasting • Addit
Slide 17: Portfolio update – CRA
Portfolio update – CRA CRA investment highlights Stable and predictable #1 independent digital infrastructure multi-asset platform in Czech Republic, with superior nationwide infrastructure assets with high 1 revenues linked to inflation revenue visibility from long-term contracts with a mix of CPI-
Slide 18: Portfolio update – CRA (cont.)
Portfolio update – CRA (cont.) KEY DRIVERS % REVENUE March 20232 TV & radio • Recurring revenues from broadcasters for distribution of their channels on CRA’s MUXes 1 broadcasting • Driven by # of channels and their quality with volume and/or contract length discounts 50% Mobile towers • Site hostin
Slide 19: Portfolio update – Hudson Interxchange
Portfolio update – Hudson Interxchange Interconnect data centre Financial performance • Hudson InterXchange is located in the most connected building in New York City, 60 Hudson, • Revenue for the six month period grew 15.8% to $11.2 million, due to new contracts signed on and offers over 300 carrie
Slide 20: Portfolio update – Speed Fibre Group
Portfolio update – Speed Fibre Group Speed Fibre Group investment highlights 1 A national digital network in a strategically-located market acquired at an attractive price. Two complementary operating companies, combined to create a #1 carrier-neutral wholesale fibre business and vertically integrat
Slide 21: Portfolio update – Speed Fibre Group (cont.)
Portfolio update – Speed Fibre Group (cont.) KEY DRIVERS % OF 2022 REVENUE • Recurring revenues from proprietary open access fibre and wireless network, and national backhaul network Wholesale / 1 Backhaul • Concession agreement with the government to maintain and operate 88 Metropolitan Access Netw
Slide 22: Market context & pipeline
Market context & pipeline Cordiant Digital Infrastructure Limited 22
Slide 23: Market dynamics – Leads to some repricing
Market dynamics – Leads to some repricing Drop in multiples for mid-market deals creates opportunities for CORD 2% increase 28.5x 26.0x 26.5x 22% decrease 23.5x 6% decrease 20.2x 18.8x 18.4x 18.8x 17.7x 15.7x Highly competitive 10.2x Less crowded trade CORD 1 Large-cap Large-cap Mid-market 4 3 Publi
Slide 24: Market dynamics – New financial conditions favour Buy, Build & Grow
Market dynamics – New financial conditions favour Buy, Build & Grow… Interest rates (5-year swaps) – then and now1 Commentary • Steep increases in 5-year swap rates in the past year have favoured Infrastructure investment in a Core Plus / Value Add model 5.049% • Some evidence of swap rates levellin
Slide 25: Pipeline – Current opportunities (>€3bn)
Pipeline – Current opportunities (>€3bn) Pipeline by geography Pipeline by sub-sector Multi-asset 5% Broadcast Towers North America 13% United Kingdom 18% 17% 14% Mobile Telecommunications Fibre-optic networks 18% 45% Data Centres Mainland Europe 70% Commentary • Pipeline is somewhat weighted toward
Slide 26: ESG & impact
ESG & impact Cordiant Digital Infrastructure Limited 26
Slide 27: ESG & Impact – Company and Portfolio
ESG & Impact – Company and Portfolio Highlights • The Company and its portfolio platforms have continued to focus on implementing new and strengthening existing sustainability initiatives, centring on the Company’s three lynchpin approach to mitigating the digital infrastructure sectors impact to th
Slide 28: ESG & Impact – New Portfolio Acquisition
ESG & Impact – New Portfolio Acquisition Speed Fibre Group – E,S and G Highlights • The Company completed the acquisition of a new platform asset, Speed Fibre Group (‘SFG’). The Irish telecommunications business focuses on telecoms infrastructure as well as communications service provisions, is Irel
Slide 29: Conclusion
Conclusion Cordiant Digital Infrastructure Limited 29
Slide 30: Conclusion
Conclusion 1 2 3 Strong operational Speed Fibre acquisition contributes Solid performance despite discount performance – EBITDA up 5.5% €23 million of EBITDA and portfolio rate and FX headwinds for the six-month period diversification 4 5 6 Dividend covered 1.2x by Adjusted Ample liquidity to suppor
Slide 31: Appendix
Appendix Cordiant Digital Infrastructure Limited 31
Slide 32: Appendix – AFFO analysis and dividend cover
Appendix – AFFO analysis and dividend cover Twelve months to 30-Sep-2023 (unaudited)1 Twelve months to 31-Mar-2023 (unaudited)2 £m £m Portfolio company revenues 214.1 200.4 Portfolio company normalised EBITDA 111.1 105.0 Dividend coverage, EBITDA basis 3.6x 3.4x Net Company-specific costs (14.0) (8.
Slide 33: Appendix – Returns model
Appendix – Returns model For the six month period to September 2023 Annual target return per prospectus (once fully invested) Return per asset (%) (%) CRA (0.1%) - Hudson Interxchange (18.7%) - Emitel 7.5% - Total portfolio company return 2.4% 10.2% Cash 4.0% - Total asset return1 2.6% 10.2% Managem
Slide 34: Appendix – Statement of comprehensive income (audited)
Appendix – Statement of comprehensive income (audited) IFRS Statement of Total unrealised Net foreign Comprehensive Income Total Accrued income Fund expenses value movement exchange translation For the period ended 30 September 2023 £m £m £m £m £m Net gains on investments at fair value through profi
Slide 35: Appendix – Statement of financial position (unaudited)
Appendix – Statement of financial position (unaudited) IFRS Statement of Other assets/ Inter-company Total Emitel CRA Hudson Cash Eurobond Financial Position (liabilities) balances As at 30 September 2023 £m £m £m £m £m £m £m £m Investments at fair value through profit or loss 896.1 461.2 388.6 48.9
Slide 36: Market dynamics – Cordiant Digital Infrastructure's value creation model
Market dynamics – Cordiant Digital Infrastructure’s value creation model Traditional infrastructure investing (indicative) Cordiant Digital Infrastructure – Buy, Build & Grow strategy (Core Plus and Value Add, indicative) …driven by a unique marriage of operating and private equity expertise Tuck-un
Slide 37: Appendix – Cordiant Capital at a glance
Appendix – Cordiant Capital at a glance An Institutional Manager Strong Proprietary True sector specialists in Serving large insurance companies (including deal flow digital infrastructure SIFIs), pension plans, private banking Investment team combines senior operating platforms, multi-asset funds,
Slide 38: Cordiant Capital (Investment Manager)
Cordiant Capital (Investment Manager) Senior Digital Infrastructure team 1 Depth of experience stands out in the market, enabling better buying Steven Marshall Benn Mikula Jean-Francois Sauvé Stephen Foss Chairman of Cordiant Digital CEO, Cordiant Capital Executive Chairman, Cordiant Managing Direct
Slide 39: Board
Cordiant Digital Infrastructure Limited Board Shonaid Jemmett-Page FCA Marten Pieters Chairman Non-executive Director • 20 years at KPMG, rising to Partner • 29 years senior international telecoms sector experience • Currently non-executive Director of Aviva plc, non-executive • Currently chair of t
Slide 40: Thank you
Thank you If you have any queries, please do not hesitate to get in touch INVESTMENT MANAGER Cordiant Capital Inc., Suite 2800, 1002 Sherbrooke, St. W, Montreal, QC, H3A 3L6. Canada +1 (0) 514-286-1142 CordiantDigitalTrust@cordiantcap.com MEDIA / PR Philip Dennis / Felicity Winkles / Ali AlQahtani C
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