31 July J uly 2015 Colt Group S.A. H results and s trategy update 1

Transcription

1 Colt Group S.A results and strategy update 31 July J uly 2015 Colt Group S.A results and s trategy update 1

2 Forward looking statements This presentation contains 'forward-looking statements' including statements concerning plans, future events or performance and underlying assumptions and other statements which are other than statements of historical fact. Colt Group S.A., ("the Group"), wishes to caution readers that any such forward looking statements are not guarantees of future performance and certain important factors could in the future affect the Group's actual results and could cause the Group's actual results for future periods to differ materially from those expressed in any forward looking statement made by or on behalf of the Group. These include, among others, the following: (i) any adverse change in regulations and technology within the IT services and communications industries, (ii) the Group's ability to manage its growth, (iii) the nature of the competition that the Group will encounter and wider economic conditions including economic downturns and (iv) unforeseen operational or technical problems. The Group undertakes no obligation to release publicly the results of any revision to these forward looking statements that may be made to reflect errors or circumstances that occur after the date hereof. No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed historical or published earnings. This presentation is for information purposes only and does not constitute an offering of securities. This presentation is not intended to provide the basis for any credit or other evaluation of any securities of the Group and should not be considered as a recommendation that any person should subscribe for, dispose of or purchase any such securities or enter into any other transaction with the Group or any other person. 31 J uly 2015 Colt Group S.A results and s trategy update 2

3 Contents 01 Strategic highlights results 03 Summary 04 Questions 05 Appendices 31 J uly 2015 Colt Group S.A results and s trategy update 3

4 01 Strategic highlights Rakesh Bhasin, CEO 31 J uly 2015 Colt Group S.A results and s trategy update 4

5 2015 Highlights Strong Performance On an Underlying 1 basis: Group revenue stable (up 0.2%) at 791m EBITDA increased 5.6% to 156m Free cash flow improved by 39m Execution is on track Fidelity Offer Offer of 190p per share, announced 19 June EGM 11 August Strategic focus and simplification June Announced exit of IT Services and focus on Core infrastructure 1 Underlying performance includes Colt Asia pro-forma (pre-acquisition) revenue and EBITDA within 2014 unaudited results. It also removes the impact of low margin carrier voice contracts which we have since exited, non-recurring duct sales, and FX for the six months to 30 June J uly 2015 Colt Group S.A results and s trategy update 5

6 Business Plan Aim To maximise return for shareholders and accelerate performance improvement Vision To be the most customer oriented business in our industry To be achieved by refocusing on our infrastructure based core strengths: Focus on Network, Voice and Data Centre Services ( Core Business ) Controlled exit of IT Services over two to three years Financial implications in m non-cash impairment charge 32m cash exceptional charge of (on target for total 45m to 55m IT Services and 25m core business) 31 J uly 2015 Colt Group S.A results and s trategy update 6

7 Lines of business performance 2015 Revenue: 186.1m EBITDA: 26.3m 14% Capex: 6.6m Revenue: 433.9m EBITDA: 114.8m 27% Capex: 71.5m Network Services Cash generation** Voice Services IT Services Loss* Revenue: 33.3m EBITDA: - 7.7m -23% Capex: 7.3m Cash consumption* * Profit* Colt Asia Revenue: 80.0m EBITDA: 9.5m 12% Capex: 6.8m Data Centre Services Revenue: 57.5m EBITDA: 13.5m 23% Capex: 22.4m Core Business * Profit / Loss is EBITDA margin as a percentage of revenue ** Cash generation / consumption is EBITDA less capex 31 J uly 2015 Colt Business Plan 7

8 results Hugo Eales, CFO 31 J uly 2015 Colt Group S.A results and s trategy update 8

9 2015 results m Movement Total revenue % Underlying 1 total revenue % Core business revenue % EBITDA % Underlying 1 EBITDA % Free cash outflow 4 (7) (29) 75% Underlying 1 free cash in/(out)flow (7) (46) 84% Core business 5 free cash in/(out)flow 8 (0) N/A Capital expenditure (9%) Net funds (56%) 1 Underlying performance includes Colt Asia pro-forma (pre-acquisition) revenue and EBITDA within 2014 unaudited results. It also removes the impact of low margin carrier voice contracts which we have since exited, non-recurring duct sales, and FX for the six months to 30 June Core business revenue excludes IT Services and exceptional items. 3 EBITDA reflects profit before net finance costs and related foreign exchange, tax, depreciation, amortisation and exceptional items. 4 Includes cash restructuring payments of 13.8m in 2015 ( 2014: 6.9m). 5 Core business free cash outflow excludes IT Services. A green coloured arrow denotes improved performance, a brown arrow denotes worse. 31 J uly 2015 Colt Group S.A results and s trategy update 9

10 Network Services Financial results Continuing decline in Legacy SDH Bandwidth Increased off-net business due to growth in Managed Networking Margin pressures due to evolution in the product revenue mix m Movement Revenue % Revenue (underlying) 1 1% EBITDA (2%) EBITDA (underlying) 1 1% Capex (14%) 1 excluding FX and non-recurring asset sales in 2014 Revenue mix m Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Bandwidth Services (excluding SDH) Legacy SDH Bandwidth Managed Networking 31 J uly 2015 Colt Group S.A results and s trategy update 10

11 Voice Services Financial results Revenue and EBITDA continue to be impacted by mobile and fixed termination rate declines Revenue decline driven by exit from lower margin carrier voice trading contracts Exit from low margin carrier voice trading contracts EBITDA margin continues to show yoy improvement m Movement Revenue (29%) Revenue (underlying) 1 (1%) EBITDA % EBITDA (underlying) 1 13% Capex 7 7 2% 1 excluding FX and exited low margin carrier voice trading contracts in 2014 EBITDA margin 14.7% 17.1% 14.6% 13.7% 10.6% 9.3% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 31 J uly 2015 Colt Group S.A results and s trategy update 11

12 Data Centre Services Financial results Growth in revenue consisting wholly of co-location revenue Excluding FX, revenue declined due to our withdrawal from Ftec, and salesforce vacancies in the period m Movement Revenue % Revenue (cc.) (4%) EBITDA (8%) Capex % Higher fixed costs in the period led to a decline in EBITDA Capex investment predominantly in our London 3 data centre 31 J uly 2015 Colt Group S.A results and s trategy update 12

13 IT Services Exit of IT Services Decision to exit IT Services over the next two to three years to focus on Core Business Continue to honour existing contracts through to termination but will no longer seek new business m Movement Revenue (11%) Revenue (cc.) (14%) EBITDA (8) (13) 39% Capex 7 16 (54%) Financial results Decline in revenue due to lower equipment sales in the period Improvement in EBITDA loss driven by cost savings 31 J uly 2015 Colt Group S.A results and s trategy update 13

14 Colt Asia* Performance Colt Asia s financial and operational performance continue to deliver ahead of plan Financial results Strong growth in both revenue and EBITDA, ahead of targets. Reduction in capex due to significant spend in prior year on our next generation Ethernet platform m 2015 Movement Revenue % Revenue (cc.) 9% EBITDA % Capex 7 13 (47%) 1 Pro-forma 2014 results * Formerly known as KVH Asia Integration The integration of the business into Colt Group remains on track 31 J uly 2015 Colt Group S.A results and s trategy update 14

15 03 Summary 31 J uly 2015 Colt Group S.A results and s trategy update 15

16 Summary We have made a lot of changes (LoB restructure, KVH acquisition, low margin carrier voice and ITS exits) 2015 a solid set of results Announced new business plan to accelerate performance improvement On target to achieve guidance for Core Business Guidance Core Business revenue 1,500m to 1,520m 1,500m to 1,530m Core Business free cash flow 70m to 80m 100m to 120m Note: Core Business refers to the combination of Network Services, Voice Services, Data Centre Services (including KVH). This excludes the operational performance of the IT Services (discontinuing) business and exceptional items. Fidelity Offer process in progress Capital markets day on 17 November, subject to Fidelity Offer process 31 J uly 2015 Colt Group S.A results and s trategy update 16

17 04 Questions 31 J uly 2015 Colt Group S.A results and s trategy update 17

18 05 Appendices 31 J uly 2015 Colt Group S.A results and s trategy update 18

19 Profits and margins (before exceptional items) m Movement Total revenue % Gross profit before depreciation % Gross profit margin (%) 42.7% 39.5% N/A 3 p.p EBITDA % EBITDA margin (%) 19.7% 18.9% N/A 1 p.p Operating (loss)/profit (11) 8 (19) (241%) Operating (loss)/profit margin (%) (1.4%) 1.1% N/A 3 p.p (Loss)/profit after taxation (16) 11 (27) (248%) 1 EBITDA reflects profit before net finance costs and related foreign exchange, tax, depreciation, amortisation and exceptional items. 31 J uly 2015 Colt Group S.A results and s trategy update 19

20 Cash flow m Movement EBITDA % Movement in receivables % Movement in payables (30) (38) 8 22% Movement in provisions/other items (excl. restructuring) Net cash generated from operations (excl. restructuring) (2) (2) (0) (0%) % Restructuring payments (14) (7) (7) (100%) Net cash generated from operations (12%) Finance costs paid/finance income received (3) 0 (3) (2,700%) Net capital expenditure (126) (138) 12 (9%) Free cash flow 2 (7) (29) 22 (75%) Cash and cash equivalents at end of period (94) (56%) 1 EBITDA is profit for the period before net finance costs and related foreign exchange, tax, depreciation, amortisation and other items. 2 Free cash flow is net cash generated from operating activities less net cash used to purchase non-current assets and net finance costs paid. 31 J uly 2015 Colt Group S.A results and s trategy update 20

21 For your time Thank you