The Information Delivery Platform for European Business 2011 Annual Report / Colt Group S.A
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2011 Annual Report / Colt Group S.A. Group Colt The information delivery platform for European business 2011 Annual Report Colt Group S.A. For the year ended 31 December 2011 Stock Code: COLT.L 21101.04 8/02/12 Proof 4 Key financial data Five year revenue summary Five year EBITDA1 summary €2,000m €400m 30% 1,679.6 1,675.4 1,622.5 246.7 235.6 1,583.6 1,554.3 330.2 332.0 212.4 318.7 194.2 195.4 +3.6% +0.5% 303.9 +4.9% 590.3 523.8 459.1 +9.6% 415.7 367.6 277.4 €1,000m €200m 15% 172.6 186.2 125.3 156.1 101.7 790.7 794.9 801.1 805.1 740.9 €0m €0m 0% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Total revenue Five year EBITDA summary Carrier Voice EBITDA margin % Corporate and Reseller Voice Managed Services 1 EBITDA is profit for the year before net finance costs, tax, depreciation, amortisation, foreign exchange and exceptional items. Data Cash & deposits and debt summary Five year free cash flow summary €450m €150m 343.7 309.9 300.4 273.6 231.1 101.4 €0m €75m (262.2) (262.2) 9.7 3 2 2.9 19.1 2 49.0 45.7 1 43.3 37.3 €-450m €0m 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Cash and cash equivalents and current asset investments 1 Included exceptional inflows of €17m Debt 2 Restructuring payments 3 Excluding MarketPrizm cashflow Contents OUR BUSINESS 02 Group at a glance OUR PERFORMANCE 04 Chairman’s statement 06 Chief Executive’s review 08 Colt Group S.A Board of Directors OUR GOVERNANCE 10 Report of the Board of Directors 40 Corporate governance statement 53 Directors’ responsibilities statements 54 Corporate Social Responsibility 59 Directors’ remuneration report FINANCIALS 66 Consolidated financial statements 67 Independent auditor’s report 100 Five year summary (unaudited) 102 Company only Annual Accounts 103 Directors’ report 105 Independent auditor’s report 115 Colt’s principal European sales offices 115 Investor information 21101.04 8/02/12 Proof 4 Our vision To be trusted by all to help organisations run smarter, faster, further Our mission Our business To be Europe's leading information delivery platform, providing organisations with: • Best-in-class customer experience • Integrated computing and network services that make a difference to their businesses Our strategy • Integrate compute and network services • Focus our resources on key growth opportunities/markets Our performance • Operate seamlessly and transparently across all our markets • Simplify how we buy, sell and contract • Automate our service and delivery model Our strategic priorities High performance Business operational Customer intimacy Innovative solutions excellence portfolio culture Our governance Our go to market Communication Services Enterprise Services Data Centre Services Serves small and medium Serves large enterprises Serves medium to sized businesses and service with large-scale large sized corporates providers through branded data centre space and unbranded solutions Financials Our assets Seamless, integrated pan-European sales and service capabilities Deep network Next Generation Integrated support 19 data centres coverage across Technologies functions (green modular) Europe ICT portfolio of component based solutions Colt Group S.A. / Annual Report 2011 1 Stock Code: COLT.L 21101.04 8/02/12 Proof 4 Group at a glance What makes us different European Integrated experience Agile and responsive With pan-European By bringing together assets, systems and computing and network Our unique size and scale processes coupled with services using advanced enables us to quickly local presence and systems and processes, respond to customers. multi-language support we are able to offer We are faster to deliver we are able to go further customers a truly smarter and willing to configure in offering our customers integrated end-to-end solutions to customer a truly consistent experience. needs. experience across Europe. Some of our awards Market 1st Winner European partner leader ‘Data Centres in certified to deliver and MEF Ethernet Winner GTB Innovation Europe awards’ VMware’s vCloud Service Provider awards 2011 award for energy data centre of the Year service 2005-2010 centres 2011 2 Colt Group S.A. / Annual Report 2011 Stock Code: COLT.L 21101.04 8/02/12 Proof 4 Group at a glance / continued Helsinki Oslo Stockholm Dublin Manchester Copenhagen Birmingham Amsterdam Hamburg London The Hague Rotterdam Hannover Warsaw Antwerp Berlin Ghent Dusseldorf Cologne Brussels Frankfurt Luxembourg Paris Prague To USA Stuttgart Our business Zurich Vienna Basel Munich Budapest Bern Zug Lyon Lugano Geneva Milan Romania SSC Turin Porto Marseille Bucharest Madrid Barcelona Rome Lisbon Valencia Our performance Helsinki Oslo Stockholm Gurgaon Our governance Dublin Manchester Copenhagen Birmingham INDIA Amsterdam Hamburg London The Hague Rotterdam Hannover Warsaw Antwerp USA Boston Berlin New York Ghent Dusseldorf Cologne Chicago Newark Brussels Frankfurt Luxembourg Paris Prague Financials Stuttgart Bangalore Zurich Vienna Basel Munich Budapest Bern Zug Lyon Lugano Geneva Milan Turin Porto Marseille Bucharest Colt data centre – 19 data centres across 10 countries Madrid Metropolitan Area Network (MAN) – 39 cities in 14 countries Barcelona Colt connected city – more than 100 connected cities including four in the USA Rome Lisbon Operational network managed end-to-end – 35,000km of network with direct fibre into 18,000 buildings Valencia Shared service operations – SSCs in Barcelona in Spain, Gurgaon and Bangalore in India, and Sibiu in Romania Network connections between cities are logical paths and may not reflect actual routes. Colt Group S.A. / Annual Report 2011 3 Stock Code: COLT.L 21101.04 8/02/12 Proof 4 Chairman’s statement Tim Hilton / Chairman Colt made progress in 2011; we have built a solid foundation and continued to improve revenue mix. We completed the most extensive reorganisation in our history. Our mission to become the leading information delivery platform for European business remains consistent and we are well positioned to take advantage of growth opportunities. Our clear objective is to return Colt to sustainable growth, at the same time being mindful of the challenging economic environment in which we operate. We are ready for the journey ahead. 2011 Focus Strategy Colt has seen many changes over the last five years and Our strategy has not changed and resonates more than 2011 was a year of continued transformation. In line with ever as our customers and their IT departments our strategy to create growth, we completed our move increasingly wrestle with managing real time information, from a geography based to a customer focused model and operating in a regulatory environment and managing created an innovative support structure. We have capital constraints. We have made considerable progress organised our business into three customer-centric in our information delivery platform mission as we leverage Business Units, leveraging shared assets, to serve our our unique compute and network assets to offer an agile customers better. The business is supported by two key platform for sharing, processing, storing and delivering Units; one combines the disciplines of IT, Technology and vital business information. Operations and the other integrates our shared service centres and in-country resources to provide seamless We continue to maintain our competitive advantage by business support. Our customers and people have innovating in the data centre space, investing selectively in welcomed the simplified structure. This year we are our network reach and growing our IT and compute providing individual reporting and business strategy for services as well as extending our overall managed services each of the revenue generating Units. capabilities. We have broadened our industry capabilities and have consolidated our strength in the financial sector Of course implementing change on this scale is always with the MarketPrizm acquisition. challenging, nevertheless I am pleased to report that revenues met market expectations and our balance sheet Corporate Governance remains healthy. We have a strong capital position to Good governance is an important part of our culture and support future profitable growth. It is currently not our values. As a Luxembourg company with a UK premium policy to make dividend payments as our priority remains listing we endeavour to ensure compliance in both to re-invest in people, processes and assets. jurisdictions. We have always been committed to full reporting in compliance with the UK Corporate Governance Code and we have developed our Governance Statement in the Annual Report further this year. 4 Colt Group S.A. / Annual Report 2011 Stock Code: COLT.L 21101.04 8/02/12 Proof 4 Chairman’s statement / continued Our business Board and Management CSR We were pleased to welcome Anthony Rabin to the Board In 2011 we took the next steps on our CSR journey. We and Audit Committee as a new non-executive Director as successfully delivered the world’s first 100% renewably part of our planned Board refresh programme. Anthony is powered dual-sourced data centre in Iceland. Our future a former CFO of Balfour Beatty plc, with significant recent sustainability plans will concentrate on continuing to Our performance and relevant financial expertise. reduce our impact on the environment and helping our customers reduce their impact on the environment, On 31 December 2011 Richard Walsh stepped down from through innovations such as our award winning modular the Board after serving for over six years. Colt has data centre design. We have enhanced our CSR reporting benefited enormously from his HR expertise, especially on this year. the Remuneration Committee. Finally, Michael Wilens joined the Board on 1 January 2012 and brings with him a Conclusion wealth of experience in the financial services and Overall 2011 was a year of progress. Colt continued to information technology sectors. execute the growth strategy and delivered in line with market expectations amid challenging economic times, Our governance On 22 February we agreed the plans for Hans Eggerstedt despite the distraction of an extensive internal to retire from the Board at the forthcoming AGM to be reorganisation.