COLT Q2 2009 Results Analyst Conference Call
23 July 2009
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 Telecom 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 the laws, regulations and policies governing the ownership of telecommunications licenses, (ii) the ability of the Group to expand and develop its networks in new markets, (iii) the Group’s ability to manage its growth, (iv) the nature of the competition that the Group will encounter and (v) 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.
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Rakesh Bhasin
Chief Executive Officer
Financial Headlines
€m
Q2 09 401.2 198.7 36.1 40.7 84.1 79.1 28.8 43.5
Q2 08 416.3 196.8 28.8 39.2 86.8 76.5 16.5 2.9
Change
Q1 09 416.2 199.7 37.3 38.9 83.1 78.9 17.1 (11.1)
Change
Total revenue Data revenue Managed Services GMBD % SG&A EBITDA PBT Free Cashflow
(15.1) 1.9 7.3 1.5 2.7 2.6 12.3 40.6
(15.0) (1.0) (1.2) 1.8 (1.0) 0.2 11.7 54.6
Favourable (adverse) change All numbers exclude exceptional items
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Highlights Q2 2009
> Continue to make progress despite this tough market - business remains resilient
– Data revenue has continued to grow – Ethernet main driver – Strong Managed Services growth – EBITDA and Profit Before Tax improved – Strong cash generation
> Three large contracts wins in the Quarter - combined TCV > €60m > Enterprise cloud platform launched with first service available > Further progress on key initiatives
– Next Generation Long Distance Network upgrade substantially complete – MSP roll-out complete – New billing platform being well received and live in six countries
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Tony Bates
Chief Operating Officer and Acting Group CFO
Headlines – Q2
€m
Q2 09 401.2 198.7 36.1 40.7 84.1 79.1 28.8 43.5
Q2 08 416.3 196.8 28.8 39.2 86.8 76.5 16.5 2.9
Trading change*
Currency impact
Q1 09 416.2 199.7 37.3 38.9 83.1 78.9 17.1 (11.1)
Trading change*
Currency impact
Total revenue Data revenue Managed Services GMBD % SG&A EBITDA PBT Free Cashflow
(8.2) 5.8 8.2 1.5 (0.9) 1.3 9.5 38.4
(6.9) (3.9) (0.9) -3.6 1.3 2.8 2.2
(17.0) (2.1) (1.5) 1.8 (0.2) 0.3 12.3 55.0
2.0 1.1 0.3 -(0.8) (0.1) (0.6) (0.4)
*At constant € exchange rates All numbers exclude exceptional items Favourable (adverse) change
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Revenue and Deferred Revenue
Revenue
Data Managed Services Corporate & Reseller Voice Carrier Voice Total Revenue
Q2 09 €m 198.7 36.1 114.0 52.4 401.2 Q2 09 132.6 65.2 197.8
Currency Trading impact change v Q2 08 % v Q2 08 %
Currency Trading impact change v Q1 09 % v Q1 09 %
2.9 28.5 (12.7) (9.4) (2.0)
Trading change v Q2 08
(1.9) (3.2) (0.9) (1.5) (1.6)
Currency impact v Q2 08
(1.1) (4.0) (6.8) (8.9) (4.1)
Trading change v Q1 09
0.6 0.8 0.3 0.3 0.5
Currency impact v Q1 09
Deferred Revenue €m Data Managed Services Total
(1.6) 16.2 14.6
(3.1) (3.4) (6.5)
(4.6) 7.3 2.7
4.0 3.3 7.3
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Revenue - Business Divisions
Q2 09 €m Major Enterprise Data Managed Services Corporate & Reseller Total Data Managed Services Corporate & Reseller Total Data Managed Services Corporate & Reseller Carrier Voice Total 101.8 28.5 35.3 165.6 45.6 6.6 59.5 111.7 51.3 1.0 19.2 52.4 123.9
Trading change v Q2 08 % * Currency impact v Q2 08 % Trading change v Q1 09 % * Currency impact v Q1 09 %
(0.1) 28.1 (13.8) 0.3 4.1 38.8 (16.0) (6.4) 8.5 (9.1) 2.7 (9.4) (0.8)
(2.1) (3.1) (2.0) (2.2) (0.9) (4.1) (0.5) (0.8) (2.7) --(1.5) (1.7)
(1.9) (6.3) (10.3) (4.6) 0.9 10.0 (7.3) (3.2) (1.0) (16.7) 2.1 (8.9) (4.2)
0.5 1.0 0.8 0.7 0.4 -0.1 0.2 0.6 --0.3 0.4
SME
W holesale
*At constant € exchange rates and calculated using restated comparatives for 2008
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Cash flow
€m EBITDA Capital expenditure Deferred revenue Working capital Provisions Interest Free cash flow Equity issue Debt repayment Exeptional item Total cash flow Net funds/(debt) Q2 09 79.1 (41.5) 2.8 40.4 10.0 (0.9) (6.0) 43.5 -(262.2) -(218.7) 243.1 Q2 08 76.5 (85.7) 4.3 (4.9) 16.9 (1.0) (8.1) 2.9 0.2 -17.0 20.1 (29.0) Q1 09 78.9 (49.6) (0.8) 28.5 (40.3) (1.3) 2.0 (11.1) 196.3 --185.2 195.9
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Capital expenditure
€m 1. Data 2. Managed Services Total success based 3. Other Total capital expenditure Q2 09 29.4 4.7 34.1 7.4 41.5 % of total 70.8% 11.4% 82.2% 17.8% 100.0% Q2 08 50.4 21.1 71.5 14.2 85.7 % of total 58.8% 24.6% 83.4% 16.6% 100.0% Q1 09 36.0 5.0 41.0 8.6 49.6 % of total 72.6% 10.1% 82.7% 17.3% 100.0%
Definitions: 1. Capital expenditure on customer premises and elsewhere in the network to support the acquisition of new Data revenue customer contracts 2. Build out of Data Centres and customer specific capital expenditure within Data Centres 3. IT, core network, new product development and office infrastructure
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