Inmarsat — Q3 2017 Earnings Presentation
25 slides from Inmarsat's earnings presentation, Nov 9, 2017
Slide 1: Q3 2017 results
INMARSAT > Q3 2017 Results Q3 2017 results 9 November 2017
Slide 2: Performance review
INMARSAT > Q3 2017 Results Performance review Rupert Pearce Chief Executive Officer
Slide 3: Operational Review – Q3 2017
Operational Review – Q3 2017 Another quarter of solid growth ˃ Group revenue up 5% to $358m, with EBITDA down 6% to $191m − GX generated revenue of $42m in Q3 2017, $102m YTD 2017 ˃ Maritime − Sequential revenue growth, due to 26% increase in VSAT revenue, offsetting lower revenue in FleetBroadband
Slide 4: Maritime – progress in Q3 2017
Maritime – progress in Q3 2017 Sequential growth supported by improving revenue mix L-band Ka-band Fleet One Fleet BroadBand Fleet Xpress > Over 2,600 > Resilient performance, in the > Acceleration in pace of installations, with around 2,000 vessels installed face of a weak market FX vessels install
Slide 5: Government – progress in Q3 2017
Government – progress in Q3 2017 On-going strong performance validates strong strategic position US International Short term higher operational Material reduction in exceptional tempo – partly hurricane-related operational revenues CSSC contract continues ramp-up Continued success in geographic dive
Slide 6: Aviation – progress in Q3 2017
Aviation – progress in Q3 2017 Further momentum continues across the business Business & General Aviation Safety In-flight connectivity services & Operational Services for Commercial Aviation > Continued double digit revenue growth in > Contracts signed with AirAsia, Philippine Airlines and SwiftBro
Slide 7: Enterprise – progress in Q3 2017
Enterprise – progress in Q3 2017 Returned to growth, but short term outlook remains challenging Legacy products will remain under pressure Continued focus on “Internet-of-Things” in the short term opportunities in the long term > Double digit growth from BGAN and GSPS, mainly due > Positive growth t
Slide 8: Q3 2017 performance - summary
Q3 2017 performance - summary Continued progress against our key priorities for 2017 Maritime Government Asset base Drive FleetBroadband ARPU Internationalise, diversify and Maintain high service and and value, progress Fleet Xpress innovate to deliver further value to connectivity levels for L-band
Slide 9: Financial Review
INMARSAT > Q3 2017 Results Financial Review Tony Bates Chief Financial Officer
Slide 10: Group Income statement – Q3 and YTD 2017
Group Income statement – Q3 and YTD 2017 $m Q3 2017 Q3 2016 Change YTD 2017 YTD 2016 Change Revenue 358.3 341.9 16.4 1,046.5 970.9 75.6 Direct costs (51.3) (41.6) (9.7) (145.5) (112.3) (33.2) Gross margin 307.0 300.3 6.7 901.0 858.6 42.4 Indirect costs (115.7) (95.7) (20.0) (333.2) (285.6) (47.6) EB
Slide 11: Q3 2017 Business Unit Summary
Q3 2017 Business Unit Summary Maritime ($m) 2017 2016 Government ($m) 2017 2016 Aviation ($m) 2017 2016 Revenue 143 143 Revenue 88 85 Revenue 54 36 Direct Costs 21 20 Direct Costs 12 14 Direct Costs 9 1 Gross Margin 122 85% 123 86% Gross Margin 76 86% 71 84% Gross Margin 45 83% 35 98% Indirect Costs
Slide 12: Maritime Results – Q3 2017
Maritime Results – Q3 2017 ˃ VSAT revenue up $6.5m, 25.8%, to $31.7m: − 3,960 ships on VSAT, including 1,960 on FX, up 1,042 y-o-y − FX installation rate ramping up – net vessels up 623 in Q3 (Q2: 529, Q1: 473) $m − New customer share of installations up to 47% in Q3 (Q2: 22%, Q1: 19%) 160 − Lower A
Slide 13: Government Results – Q3 2017
Government Results – Q3 2017 ˃ US revenue up 15.9%: $m − Short term higher operational tempo, partly hurricane-related 100 − CSSC contract continues to ramp-up 90 − Lower Boeing ToP revenues, as expected 88.4 80 84.8 70 ˃ Revenue down (14.5%) outside the US: 60 − Reduction in exceptional operational
Slide 14: Aviation Results – Q3 2017
Aviation Results – Q3 2017 ˃ Double digit revenue growth in Core business: − Total Core revenues up $15.2m, (42%) to $51.1m $m − SwiftBroadband up $4.2m, (18%) to $27.3m 60 − Classic Aero up $1.6m, (17%) to $11.2m ˃ Progress in In-Flight Connectivity installation phase: 50 53.9 − Installation revenu
Slide 15: Enterprise Results – Q3 2017
Enterprise Results – Q3 2017 ˃ Revenue up $0.6m. but markets remain challenging: $m ˃ Revenues in BGAN up 16%, GSPS up 18%: 45 − Mainly hurricane-related 40 − Revenue increase will not be sustained 35 38.2 37.6 − GSPS airtime up 9%, terminal sales up 28% 30 ˃ FB Fixed to Mobile revenues down (28%):
Slide 16: Group Cash Flow – Q3 & YTD 2017
Group Cash Flow – Q3 & YTD 2017 US$m Q3 2017 Q3 2016 Change YTD 2017 YTD 2016 Change EBITDA 191.3 204.6 (13.3) 567.8 573.0 5.2 Working capital/non-cash items (7.5) (10.1) 2.6 9.7 38.9 (29.2) Operating cash flow 183.8 194.5 (10.7) 577.5 611.9 (34.4) Capital expenditure (97.2) (99.9) 2.7 (398.0) (239.
Slide 17: Capital Expenditure – Q3 and YTD 2017
Capital Expenditure – Q3 and YTD 2017 US$m Q3 2017 Q3 2016 Change YTD 2017 YTD 2016 Change Major infrastructure projects 40.7 39.6 (1.1) 244.2 139.8 (104.4) Success-based capex 28.4 22.5 (5.9) 81.8 45.6 (36.2) Other 36.3 17.6 (18.7) 95.1 51.8 (43.3) Cash flow timing (8.2) 20.2 28.4 (23.1) 1.8 24.9 T
Slide 18: Future Guidance
Future Guidance Remains unchanged, 2017 revenue guidance narrowed ˃ 2017 revenue, excluding Ligado, now $1,225m to $1,275m (from $1,200m to $1,300m) ˃ 2018 revenue, excluding Ligado, of $1,300m to $1,500m (unchanged) ˃ As YTD 2017 results clearly demonstrate, EBITDA margin is being adversely impacte
Slide 19: Q&A
INMARSAT > Q3 2017 Results Q&A
Slide 20: Appendices
INMARSAT > Q3 2017 Results Appendices
Slide 21: H1 2017 Business Unit Summary
H1 2017 Business Unit Summary Maritime ($m) 2017 2016 Government ($m) 2017 2016 Aviation ($m) 2017 2016 Revenue 278 290 Revenue 188 141 Revenue 90 65 Direct Costs 41 42 Direct Costs 28 18 Direct Costs 8 2 Gross Margin 237 85% 248 86% Gross Margin 160 85% 123 87% Gross Margin 82 91% 63 97% Indirect C
Slide 22: Q1 2017 Business Unit Summary
Q1 2017 Business Unit Summary Maritime ($m) 2017 2016 Government ($m) 2017 2016 Aviation ($m) 2017 2016 Revenue 139 143 Revenue 86 69 Revenue 44 31 Direct Costs 20 20 Direct Costs 10 9 Direct Costs 4 1 Gross Margin 119 86% 123 86% Gross Margin 76 88% 60 87% Gross Margin 40 91% 30 97% Indirect Costs
Slide 23: Q2 2017 Business Unit Summary
Q2 2017 Business Unit Summary Maritime ($m) 2017 2016 Government ($m) 2017 2016 Aviation ($m) 2017 2016 Revenue 139 147 Revenue 102 72 Revenue 46 34 Direct Costs 21 21 Direct Costs 17 8 Direct Costs 4 1 Gross Margin 118 85% 126 86% Gross Margin 85 83% 64 89% Gross Margin 42 91% 33 97% Indirect Costs
Slide 24: FY 2016 Business Unit Summary
FY 2016 Business Unit Summary Maritime ($m) 2016 2015 Government ($m) 2016 2015 Aviation ($m) 2016 2015 Revenue 575 593 Revenue 330 287 Revenue 143 127 Direct Costs 80 86 Direct Costs 41 52 Direct Costs 3 1 Gross Margin 495 86% 507 85% Gross Margin 289 88% 235 82% Gross Margin 140 98% 126 99% Indire
Slide 25: Forward looking Statements
Q3 2017 Results 9 November 2017 Forward looking Statements This announcement contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual