Visitors stand at the French web-hosting and server provider OVH Group new headquarters in Paris, France, October 17, 2018. Picture taken October 17, 2018. REUTERS/Charles Platiau/File Photo
(Reuters) -French cloud services provider OVHcloud on Wednesday set financial targets for 2026, and said it expects to continue to benefit from digital transformation despite an uncertain macroeconomic environment and temporarily slow cloud market.
The group expects to generate weighted average annual organic revenue growth of 11% to 13% and an adjusted core profit (EBITDA) margin of close to 39% in 2026, the group said in a statement published ahead of its first Investor Day event later in the day.
Presenting its strategic plan, the group said it will "continue to rigorously manage its various costs", while margins will benefit from a gradual operating leverage effect over the period.
Some cloud companies have been grappling with slowing sales, as customers delay investment and look to cut costs.
"Despite this context, OVHcloud's revenue growth has been robust in this period relative to its peers," it said, adding it believes structural growth levers remain valid over the medium and long term.
To maximize cash generation, the group plans to reduce one-off investments such as in hyper-resilience, IPV4 or inventories linked to supply chain tensions.
For 2026, OVHcloud forecasts a positive free cash-flow.
"The transformations taking place in the digital sector, for example in artificial intelligence and quantum mechanics, are immense and we are particularly well-placed to anticipate our customers' needs," said Octave Klaba, founder and chairman of OVHcloud.
OVHcloud also retained its targets for 2024 and 2025.
(Reporting by Dagmarah Mackos; Editing by Christopher Cushing and Sherry Jacob-Phillips)
