Investor Presentation. February 2016

Transcription

1 Investor Presentation February 2016

2 Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by forward-looking words such as may, will, should, could, expect, plan, anticipate, believe, intend, estimate, predict, potential or continue, the negative of such terms or other comparable terminology, although not all forwardlooking statements contain these words. These statements are only predictions. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to update any of the forward-looking statements after the date of this presentation to conform such statements to actual results or to changes in our expectations. Such forward-looking statements are and will be subject to many risks, uncertainties and factors relating to our operations and the business environment that may cause our actual results to be materially different from any future results, express or implied, by such forward-looking statements. You are also urged to carefully review and consider the various disclosures made by us that attempt to advise interested parties of the factors that affect our business, including without limitation the disclosures made in our Annual Report on Form 10-K for the year ended December 31, 2014 under the caption Risk Factors. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: our ability to develop and market new products and services that meet customer demands and generate acceptable margins; our reliance on several large customers; our ability to negotiate and enter into acceptable contract terms with our suppliers; our ability to attract and retain qualified management and other personnel; competition in the industry in which we do business; failure of the third-party communications networks on which we depend; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which we are engaged; our ability to maintain our databases, management systems and other intellectual property; our ability to maintain adequate liquidity and produce sufficient cash flow to fund our capital expenditures and debt service; our ability to obtain capital to grow our business; technological developments and changes in the industry; our ability to complete acquisitions or divestures and to integrate any business or operation acquired; and general economic conditions. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. These forward-looking statements represent our estimates and assumptions only as of the date of this presentation regardless of any sale of our securities and, except as required by law, we undertake no obligation to update or revise publicly any forwardlooking statements, whether as a result of new information, future events or otherwise after the date of this presentation. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of

3 GTT At-a-Glance Overview GTT s global Tier 1 IP network enables clients to connect to any location in the world and with any application in the cloud. Our cloud networking services provide a better way for multinational clients to reach the cloud. Clients trust us to deliver secure solutions with simplicity, speed and agility. Investment Highlights Significant Market Opportunity Compelling Business Strategy Proven Track Record Experienced Substantial Management Growth Opportunity Team Superior Financial Profile 3

4 Extensive Global Network One of the top five IP networks in the world (1), with 250+ global PoPs Juniper-based routing/switching infrastructure located in all major global data centers, connected by multiple 10G/100G wavelengths Delivers managed wide area network services to multinational enterprise customers and IP transit services to large content and carrier customers Partner with 2,000+ last-mile providers to extend services to customer locations Extends reach to any location in the world and with any application in the cloud Enables end-to-end visibility and control over client networking solutions Purpose-built to serve thousands of enterprise, carrier, and government customers across the globe (1) Source: Dyn independent research report as of November 4,

5 Compelling Portfolio of Services EtherCloud Services Internet Services Managed Services Connectivity to any location in the world and with any application in the cloud One of the world s top 5 internet backbones Complete Turnkey Solutions Private, public and hybrid wide-area-network solutions High quality, flexible Ethernet, MPLS VPLS and IP-VPN services at any speed GTT s core IP network drives superior performance and pricing (1) Source: Dyn independent research report as of November 4, PoPs and 140K+ routes connect clients directly to over one third of internet prefixes Deep tier 1 global peering relationships to access all internet routes IP transit services for large content and carrier customers Dedicated internet access services for multinational enterprises Broadband internet for small office / branch office locations Providing end-to-end managed network services for distributed locations and users Managed Router / Switches / WiFi Managed Security Services Managed Secure Access PCI Compliance & Reporting 5

6 A Better Way to Reach the Cloud Secure public, private and hybrid connectivity solutions for multinational enterprises Public Internet Branch Offices Data Center Client Locations Headquarters Branch Offices Cloud Service Providers Public Utilities Internet Services EtherCloud Services Cloud Delivery Network Remote Users Public Internet Private Wide Area Networks Client Locations with Managed Services 6

7 Diversified Revenue Mix Customer Type Service Offering Geography (2) (2) (1) Data represents 3Q 2015 revenue mix. (2) Methodology changed in Q315 to include last mile access associated with managed services customers as Managed Services, instead of Ethercloud 7

8 Growth Strategy Expand cloud networking services to multinational clients Extend secure network connectivity to any location in the world and with any application in the cloud Deliver outstanding client experience by living our core values of simplicity, speed and agility Execute strategy through organic growth and accretive acquisitions Next Financial Objective: $1 Billion in Revenue, $250 Million in Adjusted EBITDA 8

9 Successful M&A Track Record Selected Acquisition History M&A Growth Strategy Expand cloud networking service platform Added Top 5 global Tier 1 IP network Extended network reach with over 120 PoPs in 24 countries Broadened global customer base to over 1,200 clients Expanded portfolio of global Ethernet and cloud networking service Added over 500 multinational clients Added significant managed service portfolio with deep security services Extend ubiquitous network connectivity worldwide Grow multinational client base and sales and support teams June 2011 April 2013 April Proven Approach Strong strategic fit Portfolio of IP and Ethernet services Added 60 PoPs across North America, Asia and Europe December 2009 Expanded IP and Ethernet services portfolio Extended global network coverage and scale April 2012 Expanded service portfolio with broadband capability Added enhanced managed services capabilities October 2014 Added global SIPbased voice, blue chip multinational customer base Added new global PoP locations October 2015 Successful integration of organization, systems and networks within two quarters Highly accretive based on multiple of post-synergy EBITDA (after two quarters) 9

10 ($ in Millions) Financial Highlights Revenue Gross Profit Adjusted EBITDA Unlevered FCF (1) Financial results are as reported and do not include OSN, which closed on 10/22/15 (2) Refer to non-gaap reconciliation for Adjusted EBITDA and Unlevered FCF definition. Presented as reported and unadjusted for prior acquisitions. 10

11 Liquidity and Credit Summary ($ in Millions) As of September 30, 2015 Cash $ 19.7 Undrawn Revolver 25.0 Total Liquidity 44.7 Total Debt Total Debt to Adjusted EBITDA (1) 2.72x Modest Leverage and Ample Liquidity (1) Assumes annualized Q Adjusted EBITDA (2) On October 22, 2015 GTT entered into a new $400 M Term Loan B facility and a $50 M Revolving Credit Facility 11

12 Investment Highlights Significant Market Opportunity Global demand for both IP-based and cloud services forecasted to grow rapidly Expanding need for integrated global communication and collaboration solutions Increasing complexity of customer requirements driving demand for managed solutions Compelling Business Strategy Global tier 1 IP network with top 5 internet backbone Targeting multinational clients underserved by global incumbents and regional carriers Trusted by clients to deliver secure solutions with simplicity, speed and agility Proven Track Record Significant growth; 44% Revenue CAGR and 74% Adjusted EBITDA CAGR from Proven ability to identify, close and integrate accretive acquisitions Large, diversified, blue-chip customer base Superior Financial Profile Monthly recurring revenue model (90%+ of total revenue), with expanding gross margins Low capital expenditures model delivering high Unlevered Free Cash Flow Strong balance sheet to fund organic and strategic growth Experienced Management Team Deep expertise managing high-growth communications businesses Long tenured and experienced board of directors Significant management and board ownership Note: Refer to non-gaap reconciliation for Adjusted EBITDA and Unlevered FCF definition 12

13 Adjusted EBITDA, Gross Profit, and Unlevered Free Cash Flow Non-GAAP Reconciliation Non-GAAP financial measures are provided as additional information to investors to provide an alternative method for assessing our financial condition and operating results. We believe that these non-gaap measures, when taken together with our GAAP financial measures, allow us and our investors to better evaluate our performance and profitability. These measures are not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with non-gaap financial measures used by other companies. These measures should be used in addition to and in conjunction with results presented in accordance with GAAP, and should not be relied upon to the exclusion of GAAP financial measures. We use Adjusted EBITDA and Gross Profit to evaluate operating performance and profitability, and we use Unlevered Free Cash Flow to evaluate the level of capital expenditures needed to support our revenue and Adjusted EBITDA. A reconciliation of these non-gaap financial measures to the most directly comparable GAAP financial measures is included below. Please refer to the Investor Relations section of our website for more information. 13