OVHcloud: FY2021 financial performance at the high-end of the guidance

Revenue of €663m and adjusted EBITDA margin of 39.5%

Acceleration path confirmed for 2022 and beyond

  • Healthy commercial performance with FY2021 revenue of €663 million, up 12% LFL1, at the top end of the estimated range of €655-665 million
  • Adjusted EBITDA2 of €262 million, a 39.5% margin, at the upper end of the 38% to 40% guidance, and growing 15% LFL
  • Positive FY2022 outlook with revenue growth expected in the upper half of the 10% to 15% initial guidance and adjusted EBITDA margin of around 40%
  • Successful IPO with a final size of €450 million, highest retail participation in a decade for an IPO on Euronext Paris A-Compartment (excluding State-owned companies) and exceptional involvement of OVHcloud employees to the simultaneous reserved offer

ROUBAIX, France--()--Regulatory News:

OVHcloud (Paris: OVH) announced today its annual results for the period ending August 31, 2021. This press release relates to OVH Groupe consolidated accounts.

Michel Paulin, CEO of OVHcloud, said:

By reaching the high-end of the guidance, the 2021 full-year results demonstrate the Group’s ability to deliver on its strategy. They also mark an important milestone in the life of OVHcloud as a newly listed company, evidencing that we are ready to accelerate our growth trajectory. Not only did we step up as a leading global provider, but we also opened new market segments, enhanced our go-to-market to better address corporate needs and widened our solutions portfolio to support an increasing number of use cases. Thanks to the talent of our 2500 employees worldwide, we proved the resilience of our model and broadened the relations with our trusted ecosystem across the four continents in which we operate. Building on favorable market tailwinds, OVHcloud is set up to seize the full potential of what a European Champion can get on the hypergrowth Cloud market. The company is today best positioned to meet its ambitions for FY2022 and achieve strong and continuous growth while deploying an ambitious roadmap, sustainably.”

Key figures

In € million

FY2021

FY2020

Change (%)

Change LFL (%)

Revenue

663

632

5%

12%

Adjusted EBITDA3

262

263

0%

15%

Adjusted EBITDA margin (% revenue)

39.5%

41.6%

(2.1)pp

1.3pp

Current EBITDA4

240

255

(6)%

10%

Current EBITDA margin (% revenue)

 

36.2%

40.3%

(4.1)pp

(0.7)pp

Net cash flow from operations

268

270

(1)%

-

Recurring Capex

(122)

(127)

(4)%

-

Growth Capex

(221)

(149)

48%

-

FY2021 revenue at €663m, up 12% LFL5

OVHcloud’s consolidated revenue for FY2021 reached €663 million, up 5% compared to FY2020 and delivering a 12% growth on a comparable basis, adjusted for exchange rates, perimeter changes and the direct one-off effects of the Strasbourg incident. This number is at the top end of our guidance and reflects a strong commercial performance with like-for-like growth mainly driven by ARPAC growth.

The revenue retention rate was 100%, or 103% adjusted for the one-off Strasbourg incident-related vouchers and credit notes, stable year-over-year, demonstrating the company’s resilience.

Throughout FY2021, OVHcloud has fast-tracked the rollout of its technical and commercial roadmap to strengthen its positioning as a driving force for a trusted and collective alternative in the global cloud industry. Based on its unique competitive advantages, the company achieved numerous commercial successes. On its own or with the contribution of its global scale partners (Atos, CapGemini, Sopra Steria, HCL...), the Group has been able to support a wide range of use cases, from cutting-edge tech companies such as Peachtree Corner or Lydia, to the most critical ones in data sensitive sectors such as Aerospace and Defense (ESA via Serco), HCM (Talentsoft) or Finance (Paylib, Société Générale).

OVHcloud also continued to focus on developing new cloud usages and moved forward in building up its PaaS portfolio. The company successfully deployed new solutions based on its own technology, including AI notebook and ML engine, and on technological partnerships with leading players including Platform.sh and MongoDB.

Revenue by product segment

Revenue by segment - in € million

FY2021

FY2020

Change (%)

Change LFL (%)

Private Cloud

398

389

2%

11%

Public Cloud

94

82

15%

23%

Web Cloud & Other

171

161

7%

8%

Total

663

632

5%

12%

Private Cloud, which includes Bare Metal and Hosted Private Cloud, was the segment most impacted by the vouchers and credit notes following the fire in Strasbourg. However, the segment benefited from continued low customer attrition following this event, as well as a continued improvement in ARPAC. On a like-for-like6 basis, Private Cloud revenue was up 11%.

This performance results from:

  • increased spend by technology and software customers, due to their own increased needs resulting from traffic and activity growth;
  • growth in spend by small and medium-sized business customers, due to increased use of the cloud and enhanced customer support; and
  • increased sales and marketing efforts to support the digital acquisition of customers.

Public Cloud grew 23% on a like-for-like basis. This growth was driven by a solid increase in both ARPAC and net customer acquisition, despite the Strasbourg incident, reflecting the current market dynamics.

Web Cloud & Other maintained a relatively stable contribution to revenue compared to the previous year, reflecting growth in net customer acquisition resulting from extensive digital marketing efforts, and stable ARPAC.

Revenue by geographic region

Revenue by geographic region
in € million

FY2021

FY2020

Change (%)

Change LFL (%)

France

343

329

4%

9%

Rest of Europe

193

180

7%

13%

Rest of the World

128

124

4%

18%

Total

663

632

5%

12%

Revenue growth in France was driven primarily by ARPAC growth from technology and software customers, public cloud expansion and continued web cloud customer acquisition. The French market also benefited from an increase in digital acquisitions resulting from marketing investments made in the second half of FY2020. Revenue growth also reflects the impact of the Strasbourg fire, to which France had a greater exposure than the other regions. On a like-for-like basis, revenue growth in France was 9%.

In other European countries, revenue growth was largely the result of the same trends as those observed in France, as well as the initial results of the implementation of dedicated regional sales teams. Digital revenues grew by 17% like-for-like, supporting OVHcloud’s European geographic expansion ambitions.

In the Rest of the World, digital revenues grew by 41% like-for-like, with a particularly strong performance in the United States (+143% like-for-like).

Adjusted EBITDA of €262m, up 15% LFL, and adjusted EBITDA margin of 39.5%

Current and Adjusted EBITDA
in € million

FY2021

FY2020

Change (%)

Change LFL (%)

Private Cloud

145

162

(11)%

7%

Public Cloud

34

32

7%

42%

Web Cloud & Other

61

61

0%

3%

Total Current EBITDA

240

255

(6)%

10%

Private Cloud

158

167

(5)%

12%

Public Cloud

37

33

12%

48%

Web Cloud & Other

67

63

6%

8%

Total Adjusted EBITDA

262

263

0%

15%

In FY2021, current EBITDA was €240 million and adjusted EBITDA7, which is the non-GAAP indicator primarily followed by the Group, reached €262m. On a like-for-like8 basis, adjusted EBITDA increased by 15%, and adjusted EBITDA margin reached 39.5%, at the high-end of the 38% to 40% guidance.

Operating income

Operating income was €6.5 million compared to a €30.6 million in FY2020. The impacts of the Strasbourg incident and one-off costs related to the IPO amounted €56 million. Excluding these effects, FY2021 operating income doubled compared to FY2020.

Net income

OVHcloud recorded a net loss of €(32) million compared to €(11) million in FY2020,reflecting the impact of the Strasbourg incident and one-time costs related to the IPO for a total pre-tax amount of €63 million. Excluding these one-offs, pre-tax income reached €41 million in FY2021 vs €0 million in FY2020.

Cash flow


in € million

FY2021

FY2020

Gross cash flow from operating activities

290

253

Change in working capital

(20)

22

Corporate income taxes

(1)

(4)

Net cash flow from operating activities

268

270

Recurring Capex9

(122)

(127)

Growth Capex9

(221)

(149)

M&A and other9

(11)

(24)

Net cash flow from (used in) investing activities

(354)

(300)

Net cash flow from financing & change in cash

86

30

Gross cash flow from operating activities increased 15% to €290 million in FY2021 compared to €253 million in FY2020.

Net cash flow from operating activities was relatively stable at €268 million despite the €46 million one-off cash impacts related to the IPO and the Strasbourg incident. Excluding these impacts, net cash flow from operating activities increased by 16%, in line with the LFL adjusted EBITDA increase.

Capital expenditures (purchases of tangible and intangible assets, net of disposals of tangible and intangible assets) reached €343 million in FY2021 compared to €276 million the year before. These amounts included:

- recurring capital expenditures of €122 million, representing 18% of FY2021 revenue, in line with the guidance of 16-20%, compared to €127 million in FY2020;

- growth capital expenditures of €221 million, representing 33% of FY2021 revenue, in line with the guidance of 30-34%. This amount includes non-recurring capital expenditures related to the Strasbourg fire in the amount of €21 million, or 3 percentage points of revenue.

Net financial debt and leverage

As of August 31, 2021, OVHcloud’s net financial debt was €709 million, including €53 million of lease liabilities in accordance with IFRS 16. The ratio of OVHcloud’s net financial debt to Adjusted EBITDA was 2.7x as of August 31, 2021.

On September 24, 2021, OVHcloud entered into a new debt facilities agreement with a pool of banks for a €920 million unsecured refinancing package. The facilities, which have in the meantime become fully available to OVHcloud since the completion of its initial public share offering, include a term loan in the amount of €500 million and a revolving credit facility in the amount of €420 million. These amounts were partly used to repay in full the amounts outstanding under the Existing Facilities Agreement (term loan and revolving credit facility) and the remaining Euro private placement bonds on October 25, 2021.

OVHcloud estimates that the completion of its initial public offering, which included a primary component of €350 million, and the refinancing described above allowed to reduce the leverage ratio from 2.7x to 1.4x immediately after the IPO.

outlook

On the basis of a year 2021 at the high-end of the guidance and ongoing commercial momentum OVHcloud is on track to deliver growth acceleration in the current fiscal year and beyond.

FY2022 outlook

For the full year 2022 OVHcloud expects:

  • revenue growth in the upper half of the target range of 10% to 15% initially set in the IPO documentation. Trading conditions in the first two months of the first quarter are consistent with this objective.
  • an adjusted EBITDA10 margin of around 40%, assuming inflation remains at levels consistent with FY21.

The Group continues to anticipate capital expenditures expressed as a percentage of revenue in line with the guidance given previously, i.e. between 16% and 20% of revenue for recurring capital expenditures and between 30% and 34% of revenue for growth capital expenditures.

Medium-term outlook reconfirmed

The Group reiterates its medium-term financial objectives and aims to achieve the following by 2025:

  • organic revenue growth accelerating toward mid-twenties by FY2025 driven by a shift in business mix, the deployment of the move to PaaS strategy, international expansion, and the benefit from a market shift to hybrid- and multi-cloud as well as the focus on data sovereignty
  • this accelerated growth is aimed to be achieved while maintaining adjusted EBITDA margin in line with that of FY2020, with benefits from economies of scale notably thanks to a better absorption of fixed costs over the period partly reinvested to support the ambition to accelerate growth
  • similarly, growth capital expenditures expressed as a percentage of revenue are expected to remain in line with the guidance given previously, while recurring capital expenditures are anticipated to benefit from productivity improvements and decrease as a percentage of revenue to a range of between 14% to 16%

The Board of Directors of OVHcloud, convened on November 15, 2021, reviewed and approved the Group’s consolidated financial statements for the fiscal year ended August 31, 2021. Audit procedures are being finalized. Consolidated financial statements available on corporate.ovhcloud.com website in investor relations section.

calendar

January 12, 2022: First quarter FY2022 revenue

February 15, 2022: Annual General Meeting

About OVHcloud

OVHcloud is a global player and Europe’s leading cloud provider operating over 400,000 servers within 33 data centers across four continents. For 20 years, the Group has relied on an integrated model that provides complete control of its value chain: from the design of its servers, to the construction and management of its data centers, including the orchestration of its fiber-optic network. This unique approach allows it to independently cover all the uses of its 1.6 million customers in more than 140 countries. OVHcloud now offers latest generation solutions combining performance, price predictability and total sovereignty over their data to support their growth in complete freedom.

Disclaimers

This press release contains forward-looking statements that involve risks and uncertainties, including references, concerning the Group's expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These risks and uncertainties are linked to factors out of the control of the Company and not precisely estimated, such as market conditions or competitors’ behaviors. Any forward-looking statements made in this press release are statements about OVHcloud’s beliefs and expectations and should be evaluated as such.

Forward-looking statements include statements that may relate to OVHcloud’s plans, objectives, strategies, goals, future events, future revenues or performance, and other information that is not historical information. Actual events or results may differ from those described in this press release due to a number of risks and uncertainties that are described within the IPO Registration Document filed with the Autorité des marchés financiers (AMF) on September 17, 2021 under the approval number: I. 21-052.

All amounts are presented in € million without decimal. This may in certain circumstances lead to nonmaterial differences between the sum of the figures and the subtotals that appear in the tables. 2022 objectives are expressed according to Group’s accounting standards. OVHcloud does not undertake, and specifically disclaims, any obligation or responsibility to update or amend any of the information above except as otherwise required by law.

This press release is disseminated for information purposes only and does not constitute an offer to purchase or sell, or a solicitation of an offer to sell or to purchase, any securities.

Appendix

Glossary

Like-for-like is calculated at constant FX, constant perimeter and excluding Strasbourg (SBG) direct impacts vs. FY2020. Perimeter adjustments correspond to M&A and US-entities FY2020 non-recurring items.

Net customer acquisitions for a given period are equal to the average number of customers in that period in that period less the average number of customers in the same period in the previous year. The average number of customers for a period is equal to the average number of unique customers generating revenue in each month of such period. A customer who subscribes for multiple services is treated as a single customer.

The revenue retention rate for any period is equal to the percentage calculated by dividing (i) the revenue generated in such period from customers that were present during the same period of the previous year, by (ii) the revenue generated from those customers in that previous year period. When the revenue retention rate exceeds 100%, it means that revenues from the relevant customers increased from the relevant period in the previous year to the same period in the current year, in excess of the revenue lost due to churn.

Average revenues per active customer (ARPAC) represents the revenues recorded in a given period from a given customer group, divided by the average number of customers from that group in that period (the average number of customers is determined on the same basis as in determining net customer acquisitions). ARPAC increases as customers in a given group spend more on OVHcloud services. It can also increase due to a change in mix, as an increase (or decrease) in the proportion of high-spending customers would increase (or decrease) ARPAC, irrespective of whether total revenues from the relevant customer group increase.

Current EBITDA is equal to revenues less the sum of personnel costs and other operating expenses (and excluding depreciation and amortization charges, as well as items that are classified as “other non-current operating income and expenses”).

Adjusted EBITDA is equal to current EBITDA excluding share-based compensation and expenses resulting from the payment of earn-outs from its adjusted EBITDA.

Recurring Capital Expenditures (Capex) reflects the capital expenditures needed to maintain the revenues generated during a given period for the following period.

Growth Capital Expenditures (Capex) represents all capital expenditures other than recurring capital expenditures.

Return on Growth Capital Expenditures (Capex) is calculated by dividing the difference between operating free cash flow less recurring capital expenditures for the current year and the previous year, by growth capital expenditures of the previous year.

M&A and Other include:

  • Cash inflows/(outflows) related to business combinations net of cash;
  • Receipts/(disbursements) related to disposals of consolidated securities and impact of reorganisations and loss of control;
  • Receipts/(disbursements) related to loans and advances granted.

     

Reconciliation of like-for-like and reported growth

In € million – by segments

FY2020 Reported

FX
impacts

Perimeter
impacts

FY2020 LFL

Private cloud

389

(4)

(11)

374

Public cloud

82

0

3

85

Webcloud & Other

161

0

0

161

Total Revenue

632

(4)

(8)

621

Private cloud

162

(0)

(9)

153

Public cloud

32

0

(3)

30

Webcloud & Other

61

0

0

61

Total Current EBITDA

255

(0)

(11)

244

Private cloud

167

(0)

(9)

158

Public cloud

33

0

(3)

31

Webcloud & Other

63

0

0

63

Total Adjusted EBITDA

263

(0)

(11)

252

 

 

 

 

In € million – by segments

FY2021 Reported

Perimeter
impacts

Strasbourg
impacts

FY2021 LFL

Private cloud

398

0

19

416

Public cloud

94

3

8

105

Webcloud & Other

171

0

1

173

Total Revenue

663

3

28

694

Private cloud

145

0

19

164

Public cloud

34

1

8

42

Webcloud & Other

61

0

1

63

Total Current EBITDA

240

1

28

269

Private cloud

158

0

19

177

Public cloud

37

1

8

45

Webcloud & Other

67

0

1

68

Total Adjusted EBITDA

262

1

28

291

In € million – by geographies

FY2020 Reported

FX
impacts

Perimeter
impacts

FY2020 LFL

France

329

(0)

1

329

Rest of Europe

180

(1)

0

179

Rest of the World

124

(2)

(9)

113

Total Revenue

632

(4)

(8)

621

 

 

 

 

In € million – by geographies

FY2021 Reported

Perimeter
impacts

Strasbourg impacts

FY2021 LFL

France

343

0

17

359

Rest of Europe

193

0

9

202

Rest of the World

128

3

2

133

Total Revenue

663

3

28

694

 

Consolidated statement of income

(€ thousands)

FY2021

FY2020

Revenue

663,312

632,116

Personnel expenses

(172,477)

(150,572)

Operating expenses

(250,805)

(226,579)

Current EBITDA

240,030

254,964

Depreciation and amortisation expenses

(224,042)

(215,624)

Current operating income

15,988

39,340

Other non-current operating income & expenses

(9,478)

(8,748)

Operating income

6,510

30,592

Cost of financial debt

(30,267)

(23,530)

Other financial income & expenses

1,654

(7,622)

Financial result

(28,613)

(31,152)

Pre-tax income (loss)

(22,104)

(561)

Income tax

(10,240)

(10,746)

Consolidated net income (loss)

(32,344)

(11,306)

 

Reconciliation between Current EBITDA and Adjusted EBITDA

(€ thousands)

FY2021

FY2020

Current EBITDA

240,030

254,964

Equity-settled and cash-settled compensation plans

20,998

8,182

Earn out compensation

945

-

Adjusted EBITDA

261,972

263,146

 

Consolidated statement of financial position

(€ thousands)

FY2021

FY2020

Goodwill

33,836

20,786

Other intangible assets

141,739

84,329

Property, plant and equipment

797,045

717,281

Rights of use assets

49,277

53,902

Non-current financial assets

1,303

1,280

Deferred tax assets

7,058

11,431

Other non-current assets

-

697

Total non-current assets

1,030,258

889,706

Trades receivables

35,481

25,363

Other receivables and current assets

131,959

43,385

Current tax assets

4,008

5,718

Derivative financial instruments - assets

140

121

Cash and cash equivalents

53,610

90,838

Total current assets

225,198

165,425

TOTAL ASSETS

1,255,456

1,055,131

 

 

 

Share capital

170,779

170,407

Share premiums

93,470

93,842

Reserves and retained earnings

(123,107)

(132,564)

Net income (loss)

(32,344)

(11,306)

Total equity

108,798

120,379

Non-current financial debt

639,583

579,711

Non-current lease liabilities

38,061

42,287

Other non-current financial liabilities

16,921

17,115

Non-current provisions

6,011

5,122

Deferred tax liabilities

14,144

10,961

Other non-current liabilities

7,783

7,079

Total non-current liabilities

722,503

662,275

Current financial debt

69,760

30,528

Current lease liabilities

14,837

13,871

Current provisions

31,361

21

Accounts payable

149,504

92,096

Current tax liabilities

1,694

2,075

Derivative financial instruments - liabilities

174

3,291

Other current liabilities

156,825

130,596

Total current liabilities

424,155

272,478

TOTAL LIABILITIES AND EQUITY

1,255,456

1,055,131

 

Net financial debt

(€ thousands)

FY2021

FY2020

Non-current financial debt

639,583

579,711

Current financial debt

69,760

30,528

Gross financial debt (excluding lease liabilities)

709,343

610,239

Cash and cash equivalents

(53,610)

(90,838)

Net debt

655,733

519,401

Lease liabilities

52,898

56,158

Net debt (including lease liabilities)

708,631

575,559

 

Consolidated statement of cash flows

(€ thousands)

FY2021

FY2020

Consolidated net income (loss)

(32,344)

(11,306)

Adjustments to net income items:

 

 

Depreciation, amortisation and impairment of non-current assets and rights of use relating to leases

224,042

213,558

Changes in provisions

33,610

1,314

(Gains)/losses on asset disposals and other write-offs and revaluations

10,656

6,162

Expense related to share allocations (excluding social security contributions)

13,266

5,423

(Income)/Tax expense

10,240

10,746

Net financial income (excluding foreign exchange differences)

30,075

26,956

Cash flow from operations

289,545

252,853

Change in net operating receivables and other receivables

(100,009)

(9,634)

Changes in operating payables and other payables

80,004

31,578

Change in operating working capital requirement

(20,004)

21,944

Tax paid

(1,322)

(4,358)

Cash flows from operating activities

268,218

270,438

Payments related to acquisitions of property, plant and equipment and intangible assets

(343,232)

(280,289)

Proceeds from disposal of intangible assets

(0)

4,372

Cash inflows/(outflows) related to business combinations net of cash

(12,699)

(23,916)

Receipts/(disbursements) related to disposals of consolidated securities and impact of reorganisations and loss of control

1,233

-

Receipts/(disbursements) related to loans and advances granted

205

(68)

Net cash flows used in investing activities

(354,493)

(299,901)

Capital decrease

-

(150,000)

Increase in financial debt

120,000

509,374

Repayment of financial debt

(25,374)

(230,383)

Repayment of lease liabilities

(19,061)

(20,228)

Financial interest paid

(20,675)

(18,969)

Guarantee deposits received

(277)

1,162

Cash flows from financing activities

54,613

90,960

Effect of exchange rate on cash and cash equivalents

277

(1,280)

Change in cash and cash equivalents

(31,385)

60,216

Cash and cash equivalents at beginning of the period

84,656

24,442

Cash and cash equivalents at end of the period

53,272

84,656


1 Like-for-like: at constant FX, constant perimeter and excluding Strasbourg (SBG) direct impacts vs. FY2020. Perimeter adjustments correspond to M&A and FY2020 US-entities non-recurring items

2 Adjusted EBITDA is equal to current EBITDA excluding share-based compensation and expenses resulting from the payment of earn-outs

3 Adjusted EBITDA is equal to current EBITDA excluding share-based compensation and expenses resulting from the payment of earn-outs

4 Definition in Appendix

5 Like-for-like: at constant FX and constant perimeter vs. FY2020 and excluding Strasbourg (SBG) direct impacts. Perimeter adjustments correspond to M&A and FY2020 US-entities non-recurring items

6 Like-for-like: at constant FX, constant perimeter and excluding Strasbourg (SBG) direct impacts vs. FY2020. Perimeter adjustments correspond to M&A and FY2020 US-entities non-recurring items

7 Adjusted EBITDA is equal to current EBITDA excluding share-based compensation and expenses resulting from the payment of earn-outs

8 Like-for-like: at constant FX, constant perimeter and excluding Strasbourg (SBG) direct impacts vs. FY2020. Perimeter adjustments correspond to M&A and FY2020 US-entities non-recurring items

9 Definition in Appendix

10 Adjusted EBITDA is equal to current EBITDA excluding share-based compensation and expenses resulting from the payment of earn-outs

Contacts

Media relations
Marie Vaillaud
Head of Corporate Communications
marie.vaillaud@ovhcloud.com
+ 33 (0)6 49 32 74 02

Investor relations
Marisa Baldo
Head of Financial Communications
marisa.baldo@ovhcloud.com
+ 33 (0)6 62 75 63 04

Release Summary

OVHcloud - FY2021 Annual Results

Contacts

Media relations
Marie Vaillaud
Head of Corporate Communications
marie.vaillaud@ovhcloud.com
+ 33 (0)6 49 32 74 02

Investor relations
Marisa Baldo
Head of Financial Communications
marisa.baldo@ovhcloud.com
+ 33 (0)6 62 75 63 04