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QSC AG
THE DIGITALISER TO THE GERMAN SME SECTOR
Commerzbank Sector Conference – TMT, Consumer & Real Estate
Frankfurt, 29 August 2019
QSC AG
Disclaimer
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This presentation contains forward-looking statements based on management estimates and reflects
the current views of QSC AG’s (“QSC’s”) management board with respect to future events. These
forward-looking statements correspond to the situation at the time this presentation was prepared.
Such statements are subject to risks and uncertainties, which often fall outside the sphere of influence
of QSC. These risks and uncertainties are covered in detail within the Risk Report sections of our
financial reports.
Although the forward-looking statements are made with great care, their correctness cannot be
guaranteed. Therefore the actual results may deviate from the expected results described herein.
QSC does not intend to update or adjust any forward-looking statements after the publication of
the presentation.
QSC AG
2019: The new QSC is taking shape
QSC AG 4
QSC AG
in figures2000
235
900 employees at10 locations
ISG Provider Lens
Leader GermanyCloud Transformation /
Operation Services & XaaS
2017
20,000 m2
30 years of experience and
a publicly listed company since
2019
Experton Group & West Trax
SAP HANA Leader
2019ISG Provider Lens
Leader GermanyPrivate/Hybrid Cloud – Data Center
Services & Solutions
Revenues of more than
million Euros planned in 2019
(including telecommunications)
Proprietary TÜV and ISO-certified data centres with
data centre space
QSC AG
Transaction with EnBW was closed as of 30 June 2019>
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TC subsidiary Plusnet was sold for € 205 million (enterprise value)>
Beginning of new era of growth>
Clear market focus on Cloud, SAP and IoT>
Clear sector focus on retail, manufacturing and energy>
QSC sold its TC business in Q2 2019
QSC AG
Successful transaction brings QSC back on growth track
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Performance of QSC’s market segments*
2010 2018
* Basis: Index 100, simplified – source: Federal Statistical Office 2019
100
170
90
Strategy 2020plus:
Further development of QSC AG
into market outperformer
Plusnet sale:
Successful transaction at upper end
of expectations
IT & IoT
business
TC business80
180
QSC AG
QSC now operates in the high-growth IT and IoT market
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SAPCloud IoT
B2B market in
Germany
€ 30 billion
2020
B2B market in
Germany
€ 25 billion
2020
B2B market in
Germany
€ 10 billion
2020
Sources: Experton 2017; PAC/own research; Deloitte, IoT study 2016
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Umfassendes
Leistungsportfolio
für die
Digitalisierung
Comprehensive
service portfolio
for digitalisation
SAP Services &
Consulting
Internet of Things &
Industrie 4.0
Cloud Services &
IT-Outsourcing
Colocation &
Virtual Datacenter
QSC AG
Sector-specific solutions
QSC is combining standardized and tailor-made services
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IT services for SMEs(Cloud and SAP)
Strategic partnerships
Retail
IoT products and solutionsfor Industry 4.0
Manufacturing Energy
Standardised and scalable products and services for all SME sectors+ Sourcing advisor
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QSC is focussing on the German Mittelstand
Provider
Direct sales
Global player
Web hosters ~3,500,000
~16,000
~50,000
~550
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Number of German companies by size group
Top-tier mid-size
Mid-size
Small businesses &
micro-entrepreneurs
Large companies
DAX-listed
companies
10
Direct Sales
QSC AG
Q2 2019: Financial update
QSC AG
Revenues € 85.2 million>
Key financial highlights Q2 2019
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EBITDA € 129.9 million>
EBIT € 115.5 million>
Net income € 106.1 million>
Free cash flow € 156.7 million >
QSC AG
Q2 2019 statement of income shaped by Plusnet deal
Main one-off effects
− Higher admin expenses due
to transaction costs
− All major cost items affected
by migration costs
− High other operating income
due to deconsolidation gain
− Higher financial expenses due
to repayment of debt
− Higher taxes due to transaction-
based income tax
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QSC AG
Cloud: Investing in future growth
− Higher recurring revenues with Cloud Services
led to a 26% increase in revenues in Q2 2019
− High growth necessitates ongoing investment
in personnel, technology and sales
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1 IFRS 16 effect
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Outsourcing: New structure is taking shape
− Revenue development mainly influenced
by two factors:
− Step-by-step migration of existing
customers to Cloud Services
− Termination of two large contracts in 2019
− All other contracts were extended or even
expanded in scope in 2018/2019
− Reorganisation to continue in 2019 as planned –
leaner organisation is taking shape
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1 IFRS 16 effect
QSC AG
Microsoft
SAP
Microsoft and SAP
Including/excluding IFRS 16 effect
Consulting: Double-digit growth in Q2 2019
− Consulting on fast growth track in 2019:
revenues up by 13%
− High demand especially for SAP HANA projects
− Strenghtening personnel as well as
drawing on external consultants impacted
segment contribution
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1
QSC AG
Telecommunications: Normalisation in reseller business
− Ongoing normalisation in TC reseller business;
in H1 2018, QSC benefited from a favourable
market environment
− Revenue decline had a impact on the segment contribution
− After the Plusnet deal, TC segment will still include the stable colocation business
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TC revenues with resellers
TC revenues with corporate customers
TC total
IFRS 16 effect1
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Q2 2019: Revenue split between QSC and Plusnet
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QSC AG
Focus on growth: Three uses of Plusnet sales proceeds
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Accelerated implementation of growth strategy
Potential acquisitions for targeted additions to technology portfolio
Full repayment of debt (concluded as of 30 June 2019)
1
2
3
QSC AG
M&A: Targeted additions to technology portfolio
To accelerate growth, QSC intends to acquire small tech specialists. Their profile:
− Unique technology in the field of AI, Cloud Services, Data Analytics, IoT
− Proof of concept done
− First customers or projects on board
− Revenue generation has started
− Majority participation possible
− Manageable investments (less than € 10 million investment per deal)
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QSC AG
QSC is free of debt
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− As of 30 June 2019, QSC fully
repaid its external debt
− High net income led to an
increase in equity ratio to 73%
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FY 2019 and beyond: Outlook
QSC AG
The updated forecast take into account the premature closing
of the Plusnet sale
Revenues of more than € 235 million
EBITDA of more than € 140 million
Free cash flow of more than € 130 million
On track to reaching the updated forecast
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QSC AG
QSC to start continuous growth from Q3 2019
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Q3 2019 will be characterised by:
− Ongoing growth in Cloud
and Consulting
− Further investments in future growth
(e.g. Cloud and IoT specialists as well
as SAP consultants)
QSC AG
High TCV is strengthening growth
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Latest customer wins
− DATEV extends colocation contract
by 10 years
− DIY retail chain FISHBULL commissions
QSC to introduce SAP S/4HANA
− Swiss steel group SCHMOLZ + BICKENBACH
opts for multi-cloud solution
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2022: Revenues of € ~200 million, EBITDA >10%, positive free cash flow
Future investments and M&A
“Digitaliser to the SME sector”
Attractive
business portfolioTop innovations
Effective “go-to-
market” approach
New & experienced
management team
− Highly scalable
− Recurring revenues
− New technologies
− New combined
services
− Strategic partners
− Sector focus
− Top expertise
− Entrepreneurial
approach
Strategy 2020plus: Focus on profitable growth
QSC AG
IoT
SAP
Cloud
Highly scalable and recurring business in 2022
− Application management services
− Integration of SAP into IoT
− SAP cloud business (HEC)
− S/4HANA migration*
− Infrastructure-as-a-service
− Multi-cloud management
− Cloud transformation*
− IoT devices
− IoT operations
− Edge computing
€ ~50 m
€ ~100 m
€ ~50 m
* Project business
More than 80% of our business is
highly scalable – with recurring
revenues
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QSC AG
We bring innovation to SMEs
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New technologies (examples) New combined services (examples)
− Multi-cloud and DevOps
− Artificial intelligence
− Analytics
− Permissioned Blockchain
− 5G and NB-IoT
− …
− Digital workplace
− Smart building technology
− Digital store
− Digital supply chain
− Coupling OT and IT
− …
Specifically
− S/4HANA
− Edge computing Specifically
− “Sensor meets business”
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Strategy 2020plus: Double-digit-growth
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2018* 2022
€ 135 million
€ ~200 million
Revenues
* QSC (excluding Plusnet subgroup)
EBITDA >10%
Positive FCF
QSC AG
Appendix
QSC AG
Founders increase shareholding in June 2019
In June 2019, QSC’s two funders acquired
shares as follows:
Gerd Eickers1 200,000 shares
Dr. Bernd Schlobohm2 250,000 shares
Neither founder has yet sold any QSC shares -
share ownership is now structured as follows:
12.71 % Gerd Eickers1
12.70 % Dr. Bernd Schlobohm2
74.59 % Free float
1 Founder and member of Supervisory Board2 Founder and Chairman of Supervisory Board
Status: 31 July 201931
QSC AG
Contact
QSC AG
Arne Thull
Head of Investor Relations
T +49 221 669-8724
F +49 221 669-8009
invest@qsc.de
www.qsc.de
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Twitter.com/QSCIRde
Twitter.com/QSCIRen
blog.qsc.de
xing.com/companies/QSC AG
slideshare.net/QSCAG
QSC AG
Mathias-Brüggen-Str. 55
50829 Cologne