Q2-16 financials update
10 August 2016
Disclaimer
THIS PRESENTATION IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY, AND IS NOT AN OFFER OR A SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES IN THE UNITED
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ANY INFORMATION IN THIS PRESENTATION THAT IS NOT A HISTORICAL FACT IS A “FORWARD-LOOKING STATEMENT”. SUCH STATEMENTS MAY INCLUDE OPINIONS AND
EXPECTATIONS REGARDING INTEROUTE AND ITS FUTURE BUSINESS, THE STRATEGIES OF ITS MANAGEMENT AND ITS MANAGEMENT’S EXPECTATIONS OF GLOBAL ECONOMIC
AND REGULATORY TRENDS.
BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INCLUDE UNKNOWN AND KNOWN RISKS AND UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE INTEROUTE’S
ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED IN, OR IMPLIED BY, SUCH FORWARD-LOOKING STATEMENTS.
WHILE INTEROUTE BELIEVES THAT ITS ASSUMPTIONS REGARDING FUTURE EVENTS ARE REASONABLE, THESE FORWARD-LOOKING STATEMENTS ARE ONLY PREDICTIONS AND,
IN ADDITION TO BEING SUBJECT TO UNKNOWN AND KNOWN RISKS, UNCERTAINTIES, ASSUMPTIONS AND OTHER FACTORS BEYOND INTEROUTE’S CONTROL, THERE ARE
INHERENT DIFFICULTIES IN PREDICTING CERTAIN IMPORTANT FACTORS THAT COULD IMPACT THE FUTURE PERFORMANCE OR RESULTS OF INTEROUTE’S BUSINESS. AS A
RESULT, SUCH STATEMENTS SHOULD NOT BE REGARDED AS REPRESENTATIONS AS TO WHETHER SUCH ANTICIPATED EVENTS WILL OCCUR NOR THAT EXPECTED OBJECTIVES
WILL BE ACHIEVED. ALL FORWARD-LOOKING STATEMENTS APPLY ONLY AS OF THE DATE HEREOF AND INTEROUTE UNDERTAKES NO OBLIGATION TO REVISE OR UPDATE ANY
SUCH FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
THE HISTORICAL CONSOLIDATED FINANCIAL DATA INCLUDED ON THE FOLLOWING PAGES FOR THE SIX MONTHS ENDED 30 JUNE 2016 AND 2015 FOR INTEROUTE HAVE BEEN
DERIVED FROM THE UNAUDITED MANAGEMENT ACCOUNTS, INCLUDING THE NOTES RELATED THERETO. THE FINANCIALS HAVE BEEN DERIVED FROM THE INTERNAL
ACCOUNTING FORMAT BASED ON LUXEMBOURG LEGAL AND REGULATORY REQUIREMENTS RELATING TO THE PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
(“LUXEMBOURG GAAP”). LUXEMBOURG GAAP DIFFERS IN SIGNIFICANT RESPECTS FROM INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN
UNION (“IFRS”).
THE HISTORICAL CONSOLIDATED FINANCIAL DATA INCLUDED ON THE FOLLOWING PAGES FOR THE SIX MONTHS ENDED 30 JUNE 2016 AND 2015 FOR EASYNET HAVE ALSO
BEEN DERIVED FROM UNAUDITED MANAGEMENT ACCOUNTS WHICH HAVE BEEN CONVERTED TO LUXEMBOURG GAAP (FOR PURPOSES OF PRO FORMA FINANCIAL DATA).
THIS PRESENTATION ALSO CONTAINS REFERENCES TO CERTAIN NON-LUXEMBOURG GAAP AND NON-IFRS FINANCIAL MEASURES, INCLUDING EBITDA, EBITDA MARGIN,
ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND PRO FORMA SYNERGY ADJUSTED EBITDA AS WELL AS CERTAIN LEVERAGE AND COVERAGE RATIOS THAT ARE NOT REQUIRED
BY, OR PRESENTED IN ACCORDANCE WITH, LUXEMBOURG GAAP OR IFRS. SUCH MEASURES SHOULD NOT BE CONSIDERED AS ALTERNATIVES TO OTHER INDICATORS OF
OPERATING PERFORMANCE, CASH FLOWS OR ANY OTHER MEASURE OF PERFORMANCE DERIVED IN ACCORDANCE WITH LUXEMBOURG GAAP OR IFRS. IN ADDITION, THESE
MEASURES ARE USED BY DIFFERENT COMPANIES FOR DIFFERING PURPOSES AND ARE OFTEN CALCULATED IN WAYS THAT REFLECT THE CIRCUMSTANCES OF THESE
COMPANIES, THUS LIMITING THEIR USEFULNESS AS COMPARATIVE MEASURES.
IN ADDITION, THIS PRESENTATION CONTAINS REFERENCES TO CERTAIN KEY OPERATIONAL METRICS USED BY INTEROUTE AND EASYNET, INCLUDING AVERAGE NEW NET
MONTHLY RECURRING REVENUE AND CHURN RATE, WHICH ARE ALSO NOT CONSIDERED MEASUREMENTS OF FINANCIAL PERFORMANCE UNDER LUXEMBOURG GAAP OR IFRS
AND SHOULD NOT BE CONSIDERED AS ALTERNATIVES TO OTHER INDICATORS OF OPERATING PERFORMANCE, CASH FLOWS OR ANY OTHER MEASURE OF PERFORMANCE
DERIVED IN ACCORDANCE WITH LUXEMBOURG GAAP OR IFRS. IN PARTICULAR, THE METHODOLOGY USED TO CALCULATE THESE OPERATIONAL METRICS MAY DIFFER FROM
THAT USED BY OTHER COMPANIES, THUS LIMITING THEIR USEFULNESS AS COMPARATIVE MEASURES.
INTEROUTE OBTAINED CERTAIN INDUSTRY AND MARKET DATA USED IN THIS PRESENTATION FROM PUBLICATIONS AND STUDIES CONDUCTED BY THIRD PARTIES. WHILE
INTEROUTE BELIEVES THAT THE INDUSTRY AND MARKET DATA FROM EXTERNAL SOURCES IS ACCURATE AND CORRECT, INTEROUTE HAS NOT INDEPENDENTLY VERIFIED SUCH
DATA OR SOUGHT TO VERIFY THAT THE INFORMATION REMAINS ACCURATE AS OF THE DATE OF THIS PRESENTATION AND DOES NOT MAKE ANY REPRESENTATION AS TO THE
ACCURACY OF SUCH INFORMATION.
1
Today’s presenters
Gareth Williams
Chief Executive Officer
2
Catherine Birkett
Chief Financial Officer
Table of contents
1. Executive summary
2. Business update
3. Financials
Q&A
3
Executive summary
•
1
Interoute’s consolidated revenue increased to €361.4m in the six months ended 30 June 2016 .
−
Organic (i.e. excluding Easynet), revenue growth of 4.0% y-o-y.
• H2-16 Adjusted EBITDA increased to €68.9m against €42.2m in H2-15.
• Easynet performance in line with expectations.
• Integration activity and savings remain on track.
2
• LTM pro forma revenue and pro forma (anticipated) synergy adjusted EBITDA of €747.0m and
€167.5m, respectively.
−
4
3
Leverage ratio of 3.8x at 30 June 2016.
Notes:
(1) Includes 6 months of Easynet revenue in 2016. Easynet not included in six month period ended 30 June 2015 as acquisition took place in October 2015.
(2) Includes anticipated synergies of €19.6m in addition to the €4.8m of synergies already realised in our LTM results (€24.4m of synergies expected in total as previously disclosed).
(3) Leverage ratio = Pro forma consolidated Net Debt / Pro forma full run rate synergy Adjusted EBITDA
Table of contents
1. Executive summary
2. Business update
3. Financials
Q&A
5
Q2-16 Business Update
Large deals
Interoute
•
•
For Interoute new contracts and renewals:
–
New contracts worth €67.4m
–
Renewals of €33.2m
Large deals in Network Services include Telecom Italia and Claranet; Within
Enterprise Services we signed Rheinmetall and Eriks N.V. amongst others.
Easynet
•
•
Q2 new contracts and renewals:
–
New contracts worth €22.7m
–
Renewals of €44.4m
Large deals include SCR-Sibelco NV and Barry Callebaut.
Achievements
6
•
Interoute continued to gain recognition in Enterprise Digital transformation and
adoption featuring as a Leader for the 3rd year running in the coveted 2016
Gartner Magic Quadrant for Managed Hybrid Cloud Hosting – see table
opposite.
•
One of our larger Enterprise customers is UEFA. We successfully hosted without
incident their public and private facing IT infrastructure throughout the
European Championships, hosting approximately 136m visits to the website,
mitigating sustained DDOS attacks against their website.
Analyst Recognition
Q2-16 Integration Update
Update on progress of integration of Easynet
7
Area
Actions
Comments
Integration
management and
oversight
Project programs and plans identified
• 22 integration projects closed in Q2 with 77 still active
Sales integration
and customer
focus
Integrated Sales teams addressing immediate
customer concerns as part of introducing
Interoute’s best-in-class client service procedures
across the business
• Sales offices in Paris and London consolidated
• All Service Delivery workload transferred from Easynet’s
Shepton Mallet operations centre to Interoute’s prime
operations centre in Sofia, Bulgaria
Staff synergies
Rationalisation of overlapping functions and
centralisation and consolidation of those functions
where efficiencies can be generated.
• 70 Easynet positions removed in Q2 bringing realized annualized
staff synergies to c.€13.3m.
Infrastructure
synergies
Absorption of Easynet facilities.
Expected rent, lease and power savings.
• Easynet European backbone network now running on top of the
Interoute network allowing cancellation of third party (OLO)
bandwidth
• Milan DC building closed after move of customers and opening
of a new office on the site of Interoute’s colocation centre
Systems synergies
Migrate core business to a common Interoute
systems stack
• 1st countries (Netherlands, Switzerland, Germany) migrated to
Interoute’s Oracle financial system
• High level planning completed for test migration of 1st country to
Interoute’s CRM, Inventory and NMS platforms in Q3
OLO, Suppliers,
office and other
synergies
OLO reductions. Improved position vs. suppliers
due to size. Reduction of office related costs.
• First OLO contracts signed to benefit from improved pricing and
discounts. Annualised savings of c.€0.5m realised to date
including backbone network OLO
Table of contents
1. Executive summary
2. Business overview
3. Financials
- Combined results
- Interoute
- Easynet
Q&A
8
Consolidated business gross profit and Adjusted EBITDA
Overview
(€ in millions)
Comments
6 months
Jun '15
Growth
Total revenue
226
361
59.6%
Sales related costs
(70)
(140)
100.4%
Gross margin
157
222
41.5%
69.2%
61.4%
Network costs
(45)
(50)
12.0%
Operating costs
(70)
(102)
47.0%
Gross margin %
Integration costs
EBITDA
EBITDA margin
One-off adjustments (1)
Adjusted EBITDA
Adjusted EBITDA margin
9
6 months
Jun '16
Notes:
(1)
-
(14)
42
56
18.8%
15.4%
(0)
13
42.2
68.9
18.6%
19.1%
One-off adjustments in 2016 include €13.6m for integration costs.
•
YTD results presented on this slide include 6 months of
results for Easynet in 2016.
•
Revenues increased by 59.6%, from €226.4m in H1-15 to
€361.4m in H1-16.
•
GM at 61.4% reflecting the combination with Easynet.
•
Adjusted EBITDA of €68.9m, up 63.4% y-o-y.
•
Lower EBITDA margin in 2016 due to high amount of
integration costs. Adjusted EBITDA margin higher in 2016.
31.3%
63.4%
Combined KPIs
Average new net monthly recurring revenue (MRR)(1)
Comments
•
Data combines the results for Interoute and Easynet
(Easynet included in 2015 as well).
•
Improvement in Q2-16 delivered average monthly net
MRR over Q4-15 and Q1-16 (mainly due to a number of
new large deals delivered).
•
Q1-16 was impacted by a number of large ceases in
Easynet, while Q4-15 included large ceases for a few
customers in Interoute.
•
Signed contracted value shows improvement in Q2-16
over Q1-16.
169
(65)
(84)
Q4-15
Q1-16
Signed contracted
10
Notes:
(1)
(2)
Q2-16
value(2)
168
155
162
Q4-15
Q1-16
Q2-16
Average monthly amount calculated as quarterly amount divided by 3. Incremental additional revenue from new sales delivered during a month and that will recur on a monthly
basis, excluding any usage-based revenue and net of any churn.
Increase in revenue under contract as at the end of each period from either net new contracts signed or old contracts renewed during the relevant period.
Consolidated group capex & working capital
Capital expenditure by type (1)
Net working capital
(€ in millions)
40
43
5
18
16
13
15
9
7
6 months Jun '15
Maintenance capex
Strategic growth capex
Easynet
Dec-15
Jun-16
1
0
Provisions
(23)
(23)
Trade & other debtors
129
138
61
64
Trade and other creditors
(195)
(171)
Deferred revenue
(216)
(196)
Net working capital
(242)
(188)
(€ in millions)
Stock
1
Prepayments and accrued income
6 months Jun '16
Base capex
Purchased Buildings
Comments
Comments
•
Maintenance capex lower as H1-15 included €1.9m non cash
decommissioning asset adjustment.
•
Structurally negative working capital primarily as a result of deferred
revenue from long-term contracts.
•
Base capex increased from €13.3m to €14.5m in 2016. Base capex
for Network Services decreased. However, it increased for
Enterprise Services due to one offs related to the renewal of specific
Hosting and VPN customers, DDoS security costs and CPE.
•
Consolidated net working capital for the group increased by €54.1m (2).
•
Strategic growth capex decreased by €2.4m mainly due to spend for
laterals and the Juniper capacity spend in H1-15. Offset by higher
investment in VDC platform in H1-16.
•
2016 also includes €1.1m of purchased buildings and a further
€5.4m of capex in Easynet.
11
Notes:
(1) Excludes €0.8m and €2.3m of integration capex in H1-15 and H1-16, respectively.
(2) Also €54.1m when excluding movements in stock and provisions.
•
Partially due to natural working capital movement of the
company and also due to proactive management action at the
end of 2015, which is unwinding through H1-16.
•
Lower deferred revenue balance due to exchange rate impact
in Easynet and delay in some billing due to the Easynet
migration. There is also one large quarterly recurring invoice
billed in Dec-15 (for Q1-16 revenue) but invoiced in July-16 (for
Q2-16 revenue). Remaining variance due to a customer that is
billed twice a year (July and November).
Unaudited Pro Forma Condensed Combined Financial Information
(€ in millions)
Jun-15 LTM
Jun-16 LTM
Growth
Pro forma Revenue
717.1
747.0
4.2%
Pro forma Adjusted EBITDA
140.7
147.8
5.1%
Pro forma Synergy Adjusted EBITDA
165.1
167.5
1.4%
61.7
76.0
23.2%
Pro forma Synergy Adjusted EBITDA less
Capex 1
Pro forma combined financials include the contribution of Easynet for 12 months.
Solid growth of the business on the Pro forma combined basis
12
Notes:
(1) Capex is on LTM pro forma basis. For Jun-15 LTM in Easynet, the May-15 LTM capex figures have been used. From Q2-16 reporting, integration capex has been excluded for Interoute .
Underlying anticipated synergies of €24.4m in LTM June-15 and €19.6m in LTM Jun-16. Anticipated synergies, as previously disclosed which are expected to be realised within 24 months after the Completion Date, with a substantial
portion expected to be realised within 18 months. As at 30 June 2016, we have realised approximately €4.8m of the €24.4m previously disclosed expected synergies. €2.8m of this is realised in Q2-16
Leverage development
Pro forma combined leverage
Opening leverage
(€ in millions)
xLTM June 15A
EBITDA
Amount
Pro forma synergy adjusted EBITDA (1)
Cash and cash equivalents
Revolver (€75m facility)
13
Change
xLTM June 16A
EBITDA
Amount
165
(79)
(0.5x)
167
55
(24)
(0.1x)
–
–
–
–
–
83
0.5x
(6)
78
0.5x
Fixed Rate Notes
350
2.1x
–
350
2.1x
Floating Rate Notes
240
1.5x
–
240
1.4x
Net debt
594
3.6x
49
643
3.8x
Other indebtedness (2)
•
Current
Pro forma combined leverage of 3.8x at 30 June 2016.
Notes:
(1)
(2)
Underlying synergies of €24.4m in LTM June-15 and LTM June-16.
Other indebtedness as at June 15 includes €39.9m of vendor loans and €43.4m of finance leases. As at June 16, this includes €30.7m of vendor loans, €38.3m of finance leases and €8.7m of accrued interest.
Table of contents
1. Executive summary
2. Business overview
3. Financials
- Combined Results
- Interoute
- Easynet
Q&A
14
Interoute revenue by product and by type
Revenue by type
(€ in millions)
Comments
4.0%
226
235
14
13
223
212
6 months Jun '15
(7.4)%
•
Total revenue increased by 4.0% y-o-y.
•
Strong increase in recurring revenue to €222.5m up 4.7% y-o-y.
− 6.4% growth in Enterprise Services’ recurring revenue
driven particularly by strong growth in VPN & Security,
Computing and Voice.
4.7%
− 2.2% growth in recurring revenue in Network Services due
to growth in Transport.
6 months Jun '16
Recurring
Transactional
Revenue by segment
(€ in millions)
•
4.0%
15
− 7.4% y-o-y growth in Enterprise Services, mainly due to
strong performance in VPN & Security and Computing.
226
235
92
91
(1.0%)
135
145
7.4%
6 months Jun '15
6 months Jun '16
Enterprise Services
Network Services
Growth in Enterprise Services y-o-y of 7.4%.
− 1.0% y-o-y decline in Network Services driven by reduction
in Infrastructure due to lower one-off IRU revenues YTD
and the renewal of a specific deal at a lower recurring
revenue amount offset by increase in Transport.
Interoute key KPIs
Average new net monthly recurring revenue (MRR)(1)
Comments
(€ in thousands)
•
Improvement in Q2-16 average net MRR over Q1-16 (see next
slide).
•
H1-16 new delivered services are in line with the prior year,
but ceased services are slightly higher for both Enterprise and
Network Services.
•
The most significant cease for Network Services relates to an
off-net sale to Gibraltar in Q1-16, excluding which the average
net MRR would be in line with the prior period.
•
Total churn for H1-16 is in line with H1-15.
•
Slight increase in churn rate for Enterprise and Network
Services due to one-off ceases for a small number of
customers.
230
22
191
9
208
6 months Jun '15
Enterprise
(58.0)%
182
(12.4)%
6 months Jun '16
Network
Churn
Abs.
change
0.9%
1.0%
(0.1)%
0.6%
0.3%
0.6%
0.0%
0.4%
(0.1)%
6 months Jun '15
6 months Jun '16
Enterprise Services Churn
16
Notes:
(1)
Network Services Churn
Total Churn
Average monthly amount calculated as quarterly amount divided by 3. Incremental additional revenue from new sales delivered during a month and that will recur on a monthly
basis, excluding any usage-based revenue and net of any churn.
Interoute key KPIs (continued)
Quarterly Delivered Average Net MRR (€’000)
294
•
Q2-16 was the highest delivered on new MRR
for the last five quarters.
•
Ceases improved for both Network and
Enterprise services.
•
Positive erosion in Enterprise services as cross
selling and upselling offset any price reduction.
•
Negative erosion in Network services is due to
one particular customer (cease & reprovide
order with the reprovide delivered in Q1 and
cease in May - net impact is zero).
•
Total churn rate improved over Q4-15 and Q1-16
returning to more normalised levels.
279
15
248
130
60
104
264
4
188
164
18
100
25
(8)
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
 Enterprise Services  Network Services
Churn rate (1)
1.2%
1.2%
1.2%
1.0%
0.9%
0.8%
0.7%
0.6%
0.6%
0.5%
0.6%
0.5%
0.6%
0.3%
0.4%
Q2-15
Q3-15
Enterprise Services
17
Q4-15
Q1-16
Network Services
Q2-16
Total
Interoute Gross Margin and Adjusted EBITDA
Overview
Comments
6 months
Jun '15
(€ in millions)
6 months
Jun '16
Growth
Total revenue
226
235
4.0%
Sales related costs
(70)
(80)
15.3%
Gross margin
157
155
(1.0%)
Gross margin %
69.2%
65.9%
Network costs
(45)
(46)
2.3%
Operating costs
(70)
(70)
0.5%
Integration costs
EBITDA
EBITDA margin
42
36
18.8%
15.1%
(0)
3
Adjusted EBITDA
42
39
18.6%
16.5%
18
Notes:
(1)
Profitability impacted by support costs for Easynet (including audit and insurance
fees).
•
Gross margin decreased €1.6m or 1.0%, to €155.1m.
•
(4)
One-off adjustments (1)
Adjusted EBITDA margin
•
One-off adjustments in 2016 include €3.9m for integration costs.
−
Enterprise Services increased by €2.6m, or 2.9%, to €91.5m, driven by
increase in Computing and VPN & Security sales. Offset by lower margins in
Communications due to lower Video hardware sales.
−
Network Services decreased by €4.2m due to lower one-off on-net IRU
revenue, a renewal of a specific deal with a lower recurring margin and also
because there was a one off benefit from a cost accrual release in 2015
relating to prior periods. In addition, there is a run off of deferred revenue
that was acquired from the Vtesse business.
Decrease in GM% for both Network and Enterprise Services.
−
Network Services lower (as above).
−
Enterprise Services primarily lower due to lower margin on VPN as a result of
increased customers with global requirements and one off Hosting licence
resells.
(16.2%)
•
Network costs increased by €1.0m mainly due to a movement in the onerous
lease and dilapidation provisions in H1-15 (reversed in Adjusted EBITDA).
•
Operating costs increased by €0.4m.
(7.7%)
−
€0.7m relates to headcount needed for delivery of increased revenue and
capturing future growth.
−
€0.6m of non-headcount Opex in support of Easynet offset by a €1.0m lower
bad debt charge in H1-16.
•
Adjusted EBITDA of €38.9m, down y-o-y, as explained above.
•
As previously stated planned one-off headcount expansion led to a lower %
adjusted EBITDA margin against prior year.
Table of contents
1. Executive summary
2. Business overview
3. Financials
- Combined Results
- Interoute
- Easynet
Q&A
19
Easynet summary financials
Average new net MRR and churn
Comments
(€ in thousands)
1.6%
0.8%
(151)
6 months Jun '15
Easynet average new net MRR
•
Churn at 1.6% has improved from 1.8% in Q1-16.
•
Negative average new net MRR broadly in line with expectations due to
relatively high ceases from the SME and channel business and certain dissatisfied
enterprise clients carried over from previous ownership (as previously
discussed).
•
Total revenue in EUR decreased by 8.1%.
•
Revenues in GBP decreased by 4.0% driven by declining SME, channel business
and Enterprise ceases.
•
We anticipate that these trends will continue into H2-16, as Interoute
procedures and processes, care, customer focus and stability take time to take
effect.
(149)
6 months Jun '16
Easynet churn
Revenue (using constant currency)
Revenue
(€ in millions)
(€ in millions)
137
132
137
6 months Jun '15
6 months Jun '16
6 months Jun '15
Easynet performance in line with expectations
20
Notes:
Easynet summary financials based on Lux GAAP.
126
6 months Jun '16
Easynet summary financials – profit and cash flows in EUR
Adjusted EBITDA(1)
(€ in millions)
Comments
Margin (%)
19.9%
27
6 months Jun '15
•
Improvement in Adjusted EBITDA margin from 19.9% to
23.8% driven by cost savings from integration of Easynet.
•
Adjusted EBITDA in EUR increased by 9.9%.
14.7% Adjusted EBITDA growth on a constant currency
basis.
•
Improved Adjusted EBITDA - CAPEX conversion to 81.9%
driven by higher Adjusted EBITDA and lower capex in H116.
•
Adjusted EBITDA-CAPEX in EUR increased by 24.2%, driven
by improved EBITDA and lower capex. On a constant
currency basis, this improved by 29.7%.
23.8%
30
6 months Jun '16
Adjusted EBITDA – Capex
Cash conversion(2) (%)
(€ in millions)
81.9%
72.5%
25
20
6 months Jun '15
6 months Jun '16
Improvement in adjusted EBITDA and sustained high cash flow conversion
21
(1) EBITDA to Adjusted EBITDA adjustments in the six months to June 2016 include €2.7m of restructuring costs, €1.9m redundancy costs and €5.2m for adjustments related to dilapidation and
onerous leases. Adjustments for the six months to June 2015 include €1.3m restructuring costs, €1.3m redundancy costs, €0.4m for dilapidation and onerous lease provisions and €3.9m
related to a settlement of a dispute.
(2) Defined as (Adj. EBITDA – Capex) / Adj. EBITDA
Q&A
22