OVHcloud, biggest drop in SBF 120 at close Wednesday January 4, 2023 – – 01/04/2023 at 6:01 pm

(AOF) –

OVHcloud

(-5.42% to 15.1 euros)

The cloud specialist continued to extend its losses throughout the day. In the sector, Salesforce announced plans to cut around 10% of its global workforce and close some of its offices as part of a restructuring plan.

AOF – LEARN MORE

Main points

– European number 1 in cloud services, created in 1999, with a network of 33 data centers hosting 450,000 servers on 4 continents;

– €788 million in revenue, mainly generated in Europe (78%, of which 49% in France), split between private cloud for 61%, the historical activity (site hosting and domain registration) for 23% and the public cloud for 16%;

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

– Capital 69.6% controlled by the Kabla family (employees holding 2.1%), Octave Kabla, founder, leading 9 members of the board of directors and Michel Paulin as managing director;

– Controlled balance sheet with net debt of €525 million, i.e. a leverage effect of 1.7, thus secure financing for growth until 2026.

Challenges

– “Move to PaaS” strategy:

– 25% annual increase in revenues and operating margin of 42% from 2025:

– market penetration for new uses of the cloud (artificial intelligence, encryption, etc.) and PaaS solutions brought together by partnerships;

– consolidation in Europe and development in the United States and Asia (India, Indonesia, Japan, Korea and Thailand),

– medium-sized acquisition and maintenance of growth capex at 30-34%;

– Innovation strategy through partnership ecosystem and open source:

– integration of Lunix patents within the Open Innovation Network declared with intellectual protection of own patents,

– partnership with 350 system integrators and 300 application providers,

– scientific and industrial partnerships, presence in collaborative platforms,

– Start-up Program, Marketplace, close links with component manufacturers;

– Environmental Strategy 2025:

– net zero carbon for production and suppliers (40% of the group’s footprint),

– 100% low-carbon energy by 2025;

– exclusive water-based cooling, component reconditioning,

– zero waste by 2030,

– analysis of data centers, often installed in former industrial buildings;

– Maintaining the turnover retention rate, which was 114% at the end of June;

– Specific strengths: competitive prices, open source solutions and data sovereignty through the “trusted cloud” positioning and integrated model that limits the risk of logistics disruption.

Challenges

– Strong competition in America (nearly three quarters of the French cloud market held by AWS, Microsoft and Google) and the result of the complaint against Microsoft filed with the European Commission for abuse of a dominant position in the Azure cloud;

– Energy inflation: towards a 5 to 10% increase in electricity consumption costs by 2023, compensated by increases in sales prices;

– After a 19% increase in revenues and an operating margin of 39%, the 2022-2023 goal of 16 to 20% growth in turnover and a margin “in line with 2022”;

– Absence of distribution, investments go to the growth of activity.

Learn more about the IT sector / DSE (digital services companies)

Growth is hampered by recruitment

According to a study for Numeum, the digital professional organization, 79% of companies in the sector consider that their growth is hindered by a lack of talent in the face of demand driven by digital transformation. Digital services companies forecast 5% growth for 2022. Companies have activated many levers to attract talent, especially salary, while average salaries have generally increased in the IT sector. New work organizations, career development prospects and meaningful assignments are other assets. Capgemini therefore adopted a new agreement offering up to 70% telework to all employees. These adaptations are important as a report from the Department of Research, Studies and Statistics (Dares) and France Strategy establishes that IT professions will be among those that will recruit the most in 2030. .

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