(AOF) – OVHcloud has announced the establishment of financing for a maximum amount of 200 million euros from the European Investment Bank (EIB) to support the group in its expansion. The financing has an 18-month period during which the cloud specialist can carry out several drawdowns, subject to the usual conditions precedent. The loan agreement provides attractive financial terms and a maturity of up to 9 years.
This loan increases OVHcloud’s ability to make investments aimed at increasing its capacity to build servers, to build more new data centers on existing sites or to create and invest in research and development of software and equipment in order to expand its range of services.
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Key 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, generated mainly in Europe (78%, of which 49% in France), split between the 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 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;
– Controlled balance sheet with net debt of €525 million, i.e. a leverage effect of 1.7, hence secure financing for growth until 2026.
Challenges
– “Move to PaaS” strategy:
– 25% annual increase in revenues and operating margin of 42% from 2025:
– penetration of the market for new uses of the cloud (artificial intelligence, encryption, etc.) and PaaS solutions integrated by partnerships;
– consolidation in Europe and development in the United States and Asia (India, Indonesia, Japan, Korea and Thailand),
– medium-sized acquisitions and maintenance of growth capex 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 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 in 2030,
– review of data centers, often installed in former industrial buildings;
– Maintenance of the turnover retention rate, of 114% at the end of June;
– Specific strengths: competitive price, open source solutions and data sovereignty via the “trusted cloud” positioning and integrated model limiting the risk of logistical disruption.
Challenges
– Strong American competition (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 with the Azure cloud;
– Energy inflation: towards a 5 to 10% increase in electricity consumption costs in 2023, offset by increases in selling prices;
– After a 19% increase in revenues and an operating margin of 39%, the 2022-2023 objective of 16 to 20% growth in turnover and a margin “in line with that of 2022”;
– Absence of distribution, the investments going to the growth of the activity.
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.