Colt Group S.A.

Colt Group S.A.

H1 2015 results and strategy update

31 July 2015

31 Ju ly 2015 Col t Group S .A . H1 2015 resu l t s and s t ra tegy update 1

Forward looking statements

This presentation contains 'forward-looking statements' including statements concerning plans, future events or performance and underlying assumptions and other statements which are other than statements of historical fact. Colt Group S.A., ("the Group"), wishes to caution readers that any such forward looking statements are not guarantees of future performance and certain important factors could in the future affect the Group's actual results and could cause the Group's actual results for future periods to differ materially from those expressed in any forward looking statement made by or on behalf of the Group. These include, among others, the following: (i) any adverse change in regulations and technology within the IT services and communications industries, (ii) the Group's ability to manage its growth, (iii) the nature of the competition that the Group will encounter and wider economic conditions including economic downturns and (iv) unforeseen operational or technical problems. The Group undertakes no obligation to release publicly the results of any revision to these forward looking statements that may be made to reflect errors or circumstances that occur after the date hereof.

No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed historical or published earnings.

This presentation is for information purposes only and does not constitute an offering of securities. This presentation is not intended to provide the basis for any credit or other evaluation of any securities of the Group and should not be considered as a recommendation that any person should subscribe for, dispose of or purchase any such securities or enter into any other transaction with the Group or any other person.


Contents


01 Strategic highlights

02 H1 2015 results

03 Summary

04 Questions

05 Appendices

Strategic highlights

Rakesh Bhasin, CEO


01

H1 2015 Highlights

Strong Performance

On an Underlying1 basis:

• Group revenue stable (up 0.2%) at €791m

• EBITDA increased 5.6% to €156m

• Free cash flow improved by €39m

Execution is on track

Fidelity Offer

• Offer of 190p per share, announced 19 June

• EGM 11 August

Strategic focus and simplification

• June 2015 - Announced exit of IT Services and focus on Core infrastructure

1Underlying performance includes Colt Asia pro-forma (pre-acquisition) revenue and EBITDA within 2014 unaudited results. It also removes the impact of low margin carrier voice contracts which we have since exited, non-recurring duct sales, and FX for the six months to 30 June 2014.


Business Plan

Aim

• To maximise return for shareholders and accelerate performance improvement

Vision

• “To be the most customer oriented business in our industry”

To be achieved by refocusing on our infrastructure based core strengths:

• Focus on Network, Voice and Data Centre Services (“Core Business”)

• Controlled exit of IT Services over two to three years

Financial implications in H1 2015

• €87m non-cash impairment charge

• €32m cash exceptional charge of (on target for total €45m to €55m IT Services and €25m core business)


Lines of business performance H1 2015

31 Ju ly 2015 Col t Bus iness P lan 7

* Profit / Loss is EBITDA margin as a percentage of revenue

** Cash generation / consumption is EBITDA less capex

Network

Services

IT

Services

Cash

generation**

Cash

consumption*

*

Loss*

Data

Centre

Services

Revenue: €433.9m

EBITDA: €114.8m 27%

Capex: €71.5m

Revenue: €57.5m

EBITDA: €13.5m 23%

Capex: €22.4m Revenue: €33.3m

EBITDA: -€7.7m -23%

Capex: €7.3m

Voice

Services

Revenue: €186.1m

EBITDA: €26.3m 14%

Capex: €6.6m

Profit*

Colt

Asia

Revenue: €80.0m

EBITDA: €9.5m 12%

Capex: €6.8m

Core Business

H1 2015 results

Hugo Eales, CFO


02

H1 2015 results


€’m H1

2015

H1

2014

Movement

Total revenue 791 770 3%

Underlying1 total revenue 791 757 0%

Core business revenue2 758 733 3%

EBITDA3 156 145 8%

Underlying1 EBITDA 156 146 6%

Free cash outflow4 (7) (29) 75%

Underlying1 free cash in/(out)flow (7) (46) 84%

Core business5 free cash in/(out)flow 8 (0) N/A

Capital expenditure 126 138 (9%)

Net funds 73 167 (56%)

1Underlying performance includes Colt Asia pro-forma (pre-acquisition) revenue and EBITDA within 2014 unaudited results. It also removes the impact of low margin carrier voice contracts which we have since exited, non-recurring duct sales, and FX for the six months to 30 June 2014.

2Core business revenue excludes IT Services and exceptional items.

3EBITDA reflects profit before net finance costs and related foreign exchange, tax, depreciation, amortisation and exceptional items.

4Includes cash restructuring payments of €13.8m in H1 2015 (H1 2014: €6.9m).

5Core business free cash outflow excludes IT Services.

A green coloured arrow denotes improved performance, a brown arrow denotes worse.

Network Services

Financial results

Continuing decline in Legacy SDH Bandwidth

Increased off-net business due to growth in Managed Networking

Margin pressures due to evolution in the product revenue mix


€’m H1

2015

H1

2014

Movement

Revenue 434 415 5%

Revenue (underlying)1 1%

EBITDA 115 117 (2%)

EBITDA (underlying)1 1%

Capex 72 83 (14%)

119.0 115.2 116.2 120.2 118.7 122.8

17.8 16.9 15.9 15.2 14.7 14.5

72.1 74.3 77.7 80.6 80.4 82.7

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15

Bandwidth Services (excluding SDH) Legacy SDH Bandwidth Managed Networking

Revenue mix €’m

1excluding FX and non-recurring asset sales in H1 2014

Voice Services

Financial results

Revenue and EBITDA continue to be impacted by mobile and fixed termination rate declines

Revenue decline driven by exit from lower margin carrier voice trading contracts

Exit from low margin carrier voice trading contracts

EBITDA margin continues to show yoy improvement


€’m H1

2015

H1

2014

Movement

Revenue 186 261 (29%)

Revenue (underlying)1 (1%)

EBITDA 26 26 1%

EBITDA (underlying)1 13%

Capex 7 7 2%

10.6%

9.3%

14.7%

17.1%

14.6% 13.7%

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15

EBITDA margin

1excluding FX and exited low margin carrier voice trading contracts in H1 2014

Data Centre Services

Financial results

Growth in revenue consisting wholly of co-location revenue

Excluding FX, revenue declined due to our withdrawal from Ftec, and salesforce vacancies in the period

Higher fixed costs in the period led to a decline in EBITDA

Capex investment predominantly in our London 3 data centre


€’m H1

2015

H1

2014

Movement

Revenue 58 57 1%

Revenue (cc.) (4%)

EBITDA 14 15 (8%)

Capex 22 13 67%

IT Services

Exit of IT Services

Decision to exit IT Services over the next two to three years to focus on ‘Core Business’

Continue to honour existing contracts through to termination but will no longer seek new business

Financial results

Decline in revenue due to lower equipment sales in the period

Improvement in EBITDA loss driven by cost savings


€’m H1

2015

H1

2014

Movement

Revenue 33 38 (11%)

Revenue (cc.) (14%)

EBITDA (8) (13) 39%

Capex 7 16 (54%)

Colt Asia*

Performance

Colt Asia’s financial and operational performance continue to deliver ahead of plan

Financial results

Strong growth in both revenue and EBITDA, ahead of targets.

Reduction in capex due to significant spend in prior year on our next generation Ethernet platform

Integration

The integration of the business into Colt Group remains on track


€’m H1

2015

H1

20141

Movement

Revenue 80 71 14%

Revenue (cc.) 9%

EBITDA 10 9 3%

Capex 7 13 (47%) 1Pro-forma H1 2014 results

* Formerly known as KVH Asia

Summary


03

Summary

We have made a lot of changes

(LoB restructure, KVH acquisition, low margin carrier voice and ITS exits)

H1 2015 a solid set of results

Announced new business plan to accelerate performance improvement

On target to achieve guidance for “Core Business”

Fidelity Offer process in progress

Capital markets day on 17 November, subject to Fidelity Offer process


Guidance 2015 2016

Core Business revenue €1,500m to €1,520m €1,500m to €1,530m

Core Business free cash flow €70m to €80m €100m to €120m

Note: “Core Business” refers to the combination of Network Services, Voice Services, Data Centre Services (including

KVH). This excludes the operational performance of the IT Services (discontinuing) business and exceptional items.

Questions


04

Appendices


05

Profits and margins (before exceptional items)


€’m H1 2015 H1 2014 Movement

Total revenue 791 770 21 3%

Gross profit before depreciation 338 304 34 11%

Gross profit margin (%) 42.7% 39.5% N/A 3 p.p

EBITDA1 156 145 11 8%

EBITDA margin (%) 19.7% 18.9% N/A 1 p.p

Operating (loss)/profit (11) 8 (19) (241%)

Operating (loss)/profit margin (%) (1.4%) 1.1% N/A 3 p.p

(Loss)/profit after taxation (16) 11 (27) (248%)

1EBITDA reflects profit before net finance costs and related foreign exchange, tax, depreciation, amortisation and exceptional items.

Cash flow


€’m H1 2015 H1 2014 Movement

EBITDA1 156 145 11 8%

Movement in receivables 10 10 0 6%

Movement in payables (30) (38) 8 22%

Movement in provisions/other items (excl.

restructuring)

(2) (2) (0) (0%)

Net cash generated from operations (excl.

restructuring)

135 115 20 17%

Restructuring payments (14) (7) (7) (100%)

Net cash generated from operations 121 108 13 (12%)

Finance costs paid/finance income received (3) 0 (3) (2,700%)

Net capital expenditure (126) (138) 12 (9%)

Free cash flow2 (7) (29) 22 (75%)

Cash and cash equivalents at end of period 73 167 (94) (56%)

1EBITDA is profit for the period before net finance costs and related foreign exchange, tax, depreciation, amortisation and other items. 2Free cash flow is net cash generated from operating activities less net cash used to purchase non-current assets and net finance costs paid.

Thank you For your time

Colt Group S.A.

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