Full Year 2022 Ovh Groupe SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Verun Rajwanshi - JPMorgan - Analyst : I have two questions. So, the first one, there was some press reports in early March based on interviews of firefighters who were involved in the Strasbourg fire incident. I know that the official fire investigation report hasn't been made public yet, but what have you say in response to these press reports that highlight very poor fire safety measures and also point to air cooling as one of the reasons for the damaging impact of the fire? The second question is on the data sovereignty piece. I know this is not the biggest contributor to your midterm revenue growth expectation. Is there any way to quantify the impacts of Microsoft's alleged anticompetitive practices? And how much of an uplift do you expect from the broader rollout of labor and services based on the gaia-x framework? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 14, 2022 / 9:00PM, OVH.PA - Full Year 2022 Ovh Groupe SA Earnings Call And then lastly, given your current and expected rate of cash burn, how much runway do you have before acquiring a fresh influx of capital either via debt or equity financing? And I noticed that you reaffirmed your [2025] CapEx guidance. Is there anything that you are actively pursuing to lower your growth CapEx intensity for the next two or three years? Thank you.

Question: Verun Rajwanshi - JPMorgan - Analyst : But, Yann, just to clarify, so in the near term there is no plan to accelerate the use of co-location services?

Question: Toby Ogg - Credit Suisse - Analyst : Thank you for taking the questions. Two from my side, please. So, firstly, I just wanted to touch on the public cloud segment specifically as it does seem to have been decelerating a little bit just through the first half of the year. I know you called out VPS here as a specific reason for the softer growth, but could you just expand on that and explain why that piece has been slowing down? And then also comment on whether or not the pure public cloud element has been accelerating. And perhaps just a breakdown of the mix there between the two would be helpful. And then secondly, I just wanted to come back to your customer base and the behavior over the past couple of months specifically. It does seem, based on your comments, that current trading is on a similar trajectory to your full-year guidance, suggesting that there hasn't really been any disruption from the broader political -- geopolitical issues and concerns around a recession. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 14, 2022 / 9:00PM, OVH.PA - Full Year 2022 Ovh Groupe SA Earnings Call What are you hearing from your customers around their appetite to continue with their IT spending plans given that macro uncertainty? And do you see any risk on the private cloud side specifically, just given that's a little more mission-critical, larger deployments, which, as we saw in COVID for example, can get pushed out? Any detail there would be great. Thank you.

Question: Amit Harchandani - Citi - Analyst : Good morning all. Amit Harchandani from Citi. Three questions if I may. My first question goes back to your PaaS strategy, which is clearly a key driver for long-term growth acceleration. Could you give us a sense for how much PaaS revenues are likely to contribute in fiscal 2022? And if it is REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 14, 2022 / 9:00PM, OVH.PA - Full Year 2022 Ovh Groupe SA Earnings Call likely to be immaterial, then how should we think of the pathway towards what seems like potentially EUR25 million to EUR30 million in revenues on ballpark estimates by 2025? If you could give us a sense for what are the services which would start contributing, and how should we, as the financial community, evaluate your progress and track it along this PaaS acceleration. That would be my first question. My second question goes to the topic of inflation. You have talked about energy costs being hedged for 2022, partially hedged for 2023, but clearly once your hedges roll off there might be -- potentially be pressures in your cost base around inflation. How do you plan to mitigate that? Do you have levers such as pricing power at your disposal? So, curious to understand how are you thinking about addressing the topic of inflation over the medium term? And lastly, if I may, you talked about the IP addresses and you talked about the opportunity there. Does that mean we should expect the growth CapEx in 2023 to be below the average run rate because the market has been pulled forward into 2022? Thank you.

Question: Ben Castillo - BNP Paribas - Analyst : Comment firstly, if you could, on your vertically integrated model and the supply chain impacts you're seeing for components. What are you seeing maybe through the first three months of this year over Q4 of last year? And perhaps when your expectations would be for those supply chains to perhaps normalize? The second question, just talking on pricing, could you just remind me of what price increases either you have put through to date or intend to this calendar year? And then thirdly, if you could just provide an update on MongoDB and Anthos offerings, that would be helpful. Thank you very much.

Question: Ben Castillo - BNP Paribas - Analyst : Yes, of course. So, the first question was on what you're seeing on the supply chain disruption for components. How has that changed this -- the start of this year versus the end of 2021, and perhaps what your expectations are for supply chain for the rest of this year? Thanks.

Question: George Webb - Morgan Stanley - Analyst : A couple of questions please. Firstly just on the composition of growth, I guess in the first half 13.3% like-for-like, like-for-like net retention was 111. Suggests, I guess, a relatively low level of new customer acquisition within the growth mix. Was that in line with your expectations? And how should we expect the contribution from new customers versus upsell to existing customers to trend from here? And then secondly on data sovereignty, I guess we've all seen the recent comments from the EU and US about potential creation of a new replacement for the privacy shield over the coming months. And I guess we'll have to see what the legal texts for that really looks like. But have you had any reflections early on about what that could mean for you? Thank you.

Question: Gianmarco Bonacina - Equita SIM - Analyst : A couple of questions for me, one on the top line, one on the cost. On the top line, so you are indicating a midpoint 16% revenue growth, which means in the second half you will be moving up from 14% to 18%. So, is this mainly a result of the compare from the previous year second half? Or this is something we should expect also going into the new fiscal year as a run rate as you further accelerate given the new policy introduction? The second question on the cost, you show in one of the slides that you are hiring at a base of 60 to 100 new employees per month. If you can, which I guess it translates on a yearly basis on adding about one server of new staff. How should we think about these going forward -- I mean in the next fiscal year? Do you expect the incidence of new hiring on total staff to decline or to remain at this level? And if you ever saw a breakdown by category in terms of let's say in marketing versus manufacturing and the like? Thank you.

Question: Gianmarco Bonacina - Equita SIM - Analyst : Sorry, if I may, just a very quick follow-up. So, when I look at your personnel expenses in the first semester, so clearly they've grown significantly more than the 11% of staff you were mentioning. I guess there is maybe some one-off item. But so, do you expect basically the personal cost to be significantly higher versus the number of employees also in the -- for coming quarters? Thank you.