2. Review SEC Filings
This document may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from Savvis’ expectations.
Certain factors that could affect actual results are set forth as risk
factors in Savvis’ SEC reports and filings, including its annual report
on Form 10-K for the year ended December 31, 2008, as filed with
the Securities and Exchange Commission on February 27, 2009, and
all subsequent filings. The forward-looking statements in this
document speak only as of the date of initial publication, April 29,
2009. Savvis assumes no obligation to update or supplement
forward-looking statements.
The presentation also includes references to certain non-GAAP
financial measures that provide additional information for investors.
In compliance with the SEC’s Regulation G, both Savvis’ press
release and filing on Form 8-K of April 29, 2009, include both the
rationale for why non-GAAP information is important in describing
operating performance, and the full reconciliation with corresponding
GAAP numbers.
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3. Review of First Quarter
Steadiness during uncertain times
Phil Koen, CEO
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4. First Quarter 2009 Accomplishments
• Revenue of $221.5 million • Expanded Proximity Hosting
connectivity options
– Increased 9% YoY
– Added Chi-X Canada and
– Includes $3.0M of non-recurring,
Turquoise MTF in Europe
termination fees
• Announced first Cloud Compute
• Hosting revenue of $152.3
offerings
million
– Provides unprecedented control
– Overall growth of 18% YoY
across virtualized, enterprise-class
– Managed hosting up 11% YoY
hosting environment
– Colocation up 24% YoY
– Enables customers to reduce costs
and security risk
• Adjusted EBITDA of $58.8
million
• Booked significant outsourcing
– Improved 46% YoY
deal
– Large, online digital media
• Adjusted free cash flow of $33.2
services company outsourcing
million
> 10 petabytes of storage
– Second quarter of positive
– Five-year total value > $40M
adjusted free cash flow
– Re-architect platform to drive
efficiencies and cost savings
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5. Savvis Delivers Solid Financial Results
First quarter 2009
Jeff Von Deylen, SVP Global Operations and Services
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6. First Quarter Summary
Continued growth
• Revenue of $221.5 million • Adjusted EBITDA of $58.8 million
– 9% growth over 1Q’08 – 46% growth over 1Q’08
Adjusted EBITDA Revenue
US$M US$M
$80
$225
$222 $222
$218
$60
$215 $213
$59
$52
$203
$48
$205 $40
$45
$40
$20
$195
$0
$185
1Q'08 2Q'08 3Q'08 4Q'08 1Q'09
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7. Business Unit Update
First quarter 2009
Financial Vertical Hosting Network
Financial Vertical Hosting Network
•• 26% of total •• Revenue of •• Revenue of $69.2M
26% of total Revenue of Revenue of $69.2M
revenue (19% $152.3M
revenue (19% $152.3M •• (7%) decline YoY
(7%) decline YoY
excluding Reuters)
excluding Reuters) •• 18% growth YoY
18% growth YoY •• (3%) decline QoQ
(3%) decline QoQ
•• Up 12% YoY
Up 12% YoY •• Up 1% QoQ
Up 1% QoQ •• Focus on network
Focus on network
•• Down 3% QoQ
Down 3% QoQ •• 8% growth in SaaS customers within
8% growth in SaaS customers within
•• Remain cautious in over 4Q’08 service profile
Remain cautious in over 4Q’08 service profile
2009
2009 •• Continued •• Drive network
Continued Drive network
investment in margin
investment in margin
Cloud product improvement
Cloud product improvement
development
development
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8. Quarterly Financials
US$ in millions 1Q’09 4Q’08 1Q’08
Total Hosting 152.3 150.9 129.2
Network Services 69.2 71.5 74.1
Total revenue $221.5 $222.4 $203.3
Gross profit 102.5 98.8 89.2
Percent of revenue 46% 44% 44%
SG&A 43.7 46.9 48.9
(1) (2)
Percent of revenue 20% 21% 24%
Adjusted EBITDA $58.8 $52.0 $40.3
Percent of revenue 26.5% 23.4% 19.8%
(1) SG&A expenses exclude D&A, accretion and non-cash, equity-based compensation. Total non-cash,
equity-based compensation attributed to SG&A expenses for the three months ended 3/31/09, 12/31/08
and 3/31/08, was $5.4M, $1.9M and $7.5M, respectively. (2) Amounts include a reclassification from
cost of revenue to SG&A expenses of $3.0M and $3.1M for the three months ended 12/31/08 and
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9. Utilization of Resources
Starting to see results of colo grooming
Average Monthly Revenue Hosting Revenue 1Q’09
per square foot
Colocation
Total Data Center Yield
Colo Managed
93 55% 45%
89
83 83
83
$ in millions
Avg. Billed Sq. Ft. 1Q’09
48
45
41 Managed
41
40
3%
Colo
97%
1Q'08 2Q'08 3Q'08 4Q'08 1Q'09
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10. Colocation Transformation
Customer mix shift
• Quarterly colocation revenue
4Q’06 Percent of Colo Footprint
– 4Q’06: $58.9M
◦ Average colo revenue per
sq. ft. of $31
– 1Q’09: $84.2M
Enterprise Large ◦ Average colo revenue per
47% Content sq. ft. of $48
53%
• Savvis driving mix shift
– Large content customers
◦ Pay lower wholesale-type prices
1Q’09 Percent of Colo Footprint ◦ No managed services
– Enterprise customers
Large
Content
◦ Paying market colo rates
12%
◦ Interested in managed services
Enterprise
• Higher overall yield per sq. ft.
88%
– As enterprise colo customers
add managed services
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11. Capital Expenditures
Customer growth, maintenance and expansion
Global data center expansion completed in 2008
~$246 Million ~$125 Million
estimated*
Expansion
$144M
• Global expansion plan
largely completed in 2008
• Additional expansion CAPEX
not expected for new data
center development in 2009
~$15M
~$65M
Customer Growth
$62M
• Success-based
• Product development
Maintenance and IT
~$45M
• Maintaining business standards
$40M
• General systems development
2008 2009
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* 2009 CAPEX shown at mid-range of 2009 guidance
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12. Adjusted Free Cash Flow
The right financial metric for 2009
by Quarter
US$ in millions 1Q’09 4Q’08 1Q’08
Adjusted EBITDA 58.8 52.0 40.3
Cash CAPEX (18.2) (36.9) (43.3)
Cash Interest, Net (7.4) (10.8) (3.4)
Adjusted Free Cash Flow 33.2 4.3 (6.4)
Cash CAPEX, Expansion 0.2 13.3 36.0
Adjusted Free Cash Flow, excluding expansion 33.4 17.6 29.6
Convertible note interest payments made every May and November
Expect $5.2M related outflow in 2Q’09
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13. Cash Return on Capital Employed
Using capital the right way
Savvis well-positioned within industry
$3,000
ROCE
$2,000 2,124
US$ in millions
Operating Cash Flow
Capital Employed
$1,000 24%
21%
775
14% 14%
570
9%
423
159 137 313
291 44 37
$0
(1)
SVVS EQIX RAX SDXC TMRK
Source: Company data for RAX, TMRK as of 12/31/08; SVVS, EQIX, SDXC TTM as of 3/31/09; ROCE = Op.
Cash Flow/Capital Employed (short-term and long-term debt plus equity); (1) TMRK FY’09 ends 3/31/09. 13
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14. Liquidity and Liabilities
The right balance for 2009
Issue Maturity Long
US$ in millions Date Date Term Current Total Comments
(1)
Convertible Notes 5/07 5/12 $345.0 $345.0 3% coupon
Revolver ($50M Facility) 12/08 12/11 0.0 $25M in letters of credit
(2)
UK Facility (Lombard Loan) 6/08 12/13 50.6 50.6 7.86% interest rate
Cisco Loan ’07/’08 ’12/’13 19.1 6.6 25.7 6.50% interest rate
Total Long-Term Debt $414.7
(3)
Leases ’11-’22 190.2 7.3 197.5
Current portion of long-term debt and lease obligations $13.9
Total Long-Term Debt and Leases $604.9
(4)
TTM EBITDA $203.2
Gross leverage 3.0
Net leverage 2.3
Savvis had $145.9 million in cash as of 3.31.09
(1) Adopted FSP APB 14-1 on 1/1/09. Net carrying amount is $295.1M, with an effective interest rate of 8.36%; (2) Interest rate
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fixed by interest rate swap agreement; (3) Includes $50.6 million deferred gain; (4) TTM adjusted EBITDA.
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15. Guidance for 2009
Headwinds for 2009
• Adjusted EBITDA of $190 to $200M
– Focused on improving EBITDA • American Stock Exchange (AMEX)
margin over next three to five – ~$27M annualized revenue
years contribution
– Contract terminated 3/09
• Cash capital expenditures of $110
– Acquired by NYSE Euronext
to $140M
– ~$15M in expansion
• Currency
– ~$65M of customer success,
– Volatility impact on 2008 revenue
product development
of ~$12M, mainly from UK
– ~$45M of maintenance, other
operations
• Cash interest expense of $40 to
• Financial Vertical
$45M
– 19% of total revenue (26%,
• Adjusted free cash flow of $20 to including Reuters)
$35M – Uncertain environment, given
– Targeting positive adjusted free market turmoil
cash flow in 2009
Continue to drive costs out and improve margin
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17. Customer Sentiment
Colocation
Managed Hosting Colocation
Managed Hosting
•• Customers moving
•• Active interest in IT Customers moving
Active interest in IT
to JIT purchasing
infrastructure to JIT purchasing
infrastructure
solutions
solutions •• Strength in Silicon
Strength in Silicon
Valley, DC, NY/NJ
•• Customers focused Valley, DC, NY/NJ
Customers focused
on cost savings
on cost savings •• Opportunity to be
Opportunity to be
more aggressive in
•• Customers more aggressive in
Customers
Chicago
interested in Chicago
interested in
virtualization and
virtualization and •• Would consider
Would consider
consolidation
consolidation adding space for a
adding space for a
key market
•• Savvis working to key market
Savvis working to
save customers
save customers
money
money
Overall Hosting
Overall Hosting
•• 1Q’09 roughly inline with 3Q’08 and 4Q’08
1Q’09 roughly inline with 3Q’08 and 4Q’08
•• Seeing some delays in colo bookings
Seeing some delays in colo bookings
•• Managed hosting bookings up slightly QoQ
Managed hosting bookings up slightly QoQ
•• Enterprises turning to data center outsourcing
Enterprises turning to data center outsourcing 17
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18. Industry Overview
Managed Hosting Colocation Network
Managed Hosting Colocation Network
Deal focus shifting Seeing shift in pricing Bookings up QoQ
Deal focus shifting Seeing shift in pricing Bookings up QoQ
•• Customers implementing •• Pricing for larger deals •• Encouraging indication that
Customers implementing Pricing for larger deals Encouraging indication that
selective sourcing strategy significantly more network strategy gaining
selective sourcing strategy significantly more network strategy gaining
competitive traction
competitive traction
•• Moving from mega-
Moving from mega-
providers to companies •• Price single most important •• Pricing pressure in
providers to companies Price single most important Pricing pressure in
with flexible expertise factor for customers bandwidth
with flexible expertise factor for customers bandwidth
•• Customers looking to •• Pricing holding up for •• Churn from network
Customers looking to Pricing holding up for Churn from network
accelerate time to value smaller, enterprise customers not attached to
accelerate time to value smaller, enterprise customers not attached to
customers that Savvis data center operations
customers that Savvis data center operations
•• Unbundling large projects
Unbundling large projects targets
targets •• Efforts to target customers
Efforts to target customers
•• Deals with TCV of < $10M
Deals with TCV of < $10M On our way to $50/sq. ft. associated with data
On our way to $50/sq. ft. associated with data
fastest growing segment
fastest growing segment centers proving successful
centers proving successful
Situated for LT success
Situated for LT success over long-term
over long-term
We’ll keep you updated
We’ll keep you updated
International:
Solid 1Q’09, due to ability to address global enterprise needs
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19. Savvis Cloud Compute
• Cloud Compute offering opening
customer doors for us
• Technology partner with key cloud
players like HP, Cisco, VMware
• Savvis Cloud Compute - Open and
Dedicated
– Will enable customers to reduce
costs and security risk
– Security single largest customer
concern around cloud
– Savvis has highly secure network:
helps make the cloud more secure
• Positioned in visionaries quadrant
– Gartner’s Magic Quadrant for
Managed Security Services
Providers
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20. Looking forward
• Dedicated to managed hosting
– Continues to be center point
– Expect to target more managed storage deals
– Looking to dominate Web hosting solutions market
• Long-term model moving in right direction
– Revenue mix improving
– Moving toward higher margin products
Successful first quarter
– Full-quarter of AMEX revenue
– $3.0M of non-recurring revenue items
– Still need to grow through challenges in 2009
◦ 1Q’09 storage win a significant step in backfilling revenue loss
related to AMEX
◦ Expect to be down sequentially in 2Q’09 and 3Q’09
◦ Expect to see revenue rebound in 4Q’09
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