OVHCloud, largest increase in the SBF 120 at the close of Tuesday, October 4, 2022 –

(AOF) –

OVHCloud

(+ 10.98% to 11.065 euros)

The European cloud specialist has benefited from cheap purchases, but has still lost more than 50% since the start of the year.

AOF – LEARN MORE

Key points

– European number 1 in cloud services, created in 1999, with a network of 33 data centers hosting 400,000 servers on 4 continents;

– €663 million in revenue, generated mainly in Europe (81%, of which 52% in France), 4.5% from the United States, split between the private cloud for 60%, the historical activity (hosting sites and domain registration) for 26% and the public cloud for 14%;

– Vertically integrated production model, from the manufacture of servers, the operation of data centers and network resources to the management of IT infrastructures, this proprietary technology giving a substantial cost advantage;

– Capital 69.6% controlled by the Kabla family (employees holding 2.1%), Octave Kabla, founder, chairing the 9-member board of directors and Michel Paulin being managing director;

– Net debt of €446 million, i.e. a leverage effect of 1.5 compared to €458 million in equity.

Challenges

– “Move to PaaS” strategy aiming for a 25% annual increase in revenues from 2025: market penetration of new uses of the cloud (artificial intelligence, encryption, etc.) and integrated PaaS solutions through partnerships / consolidation in Europe and development in the States States and in Asia (India, Indonesia, Japan, Korea and Thailand) / medium-sized acquisitions and growth capex maintained at 30-34%;

– Innovation strategy by partnership ecosystem and open source: pooling of Lunix patents within the Open Innovation Network articulated with the intellectual protection of own patents, partnerships with 350 system integrators and 300 application suppliers, partnerships scientific and industrial, presence in collaborative platforms, Start-up Program, Marketplace, close links with component manufacturers;

– Environmental strategy: net zero carbon and zero waste targets by 2030 and 100% use of renewable energies by 2025 / exclusive water-based cooling, component reconditioning / number 1 in the sector for energy use (PUE ) / review of data centers, often installed in former industrial buildings;

– Maintenance of the turnover retention rate, of 120% at the end of June 2022;

– Specific strengths: competitive price, technical performance, open source solutions and data sovereignty via the “trusted cloud” positioning and integrated model limiting the risk of logistical disruption.

Challenges

– Outcome of the complaint against Amazon filed with the European Commission for abuse of a dominant position with the Azure cloud;

– Confirmation of the strong growth of the public cloud, which is more profitable than the private cloud;

– Energy inflation impact: none in the short term, the costs being covered until mid-2023.

Maximum staff turnover

Companies in the IT services sector have seen the departure of more than 20% of their workforce in twelve months. This trend is not unusual in the sector, but it is reaching an unprecedented scale, in a context of strong growth and good recruitment dynamics. In addition, employees have new requirements and aspirations. The main criterion is the flexibility of work and the way it is implemented in the company. The American-Indian company Cognizant saw around 35% of its 330,000 engineers leave the company in one year. Capgemini, grouping 32,000 French employees, recently suffered its first strike since 2008, with a demand for a collective increase in remuneration.

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OVHCloud, largest increase in the SBF 120 at the close of Tuesday, October 4, 2022 –


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