SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — FY2017 Earnings Presentation
40 slides from SES SA FDR (Class A)'s earnings presentation, Feb 23, 2018
Slide 1: Full Year 2017 Results
Full Year 2017 Results Year ended 31 December 2017 Betzdorf, Luxembourg 23 February 2018 Full Year 2017 Results |
Slide 2: Agenda
Agenda Statement by the Chairman Romain Bausch, Chairman FY 2017 Highlights Karim Michel Sabbagh, President & CEO SES Video Ferdinand Kayser, CEO of SES Video SES Networks Steve Collar, CEO of SES Networks Financial Review Padraig McCarthy, CFO Looking Forward Steve Collar, President & C
Slide 3: FY 2017 Highlights
FY 2017 HIGHLIGHTS Karim Michel Sabbagh, President & CEO 3
Slide 4: Key Highlights - 2017 an Important Year of Transformation
Key Highlights - 2017 an Important Year of Transformation Credit: NBC Sports Group Establishing two new market-focused businesses (SES Video and SES Networks) in 2017 Integrating 2016 acquisitions (O3b and RR Media) and building differentiated capabilities 2017 financial performance did not me
Slide 5: Transforming the Business to Support Strategy and Growth
Transforming the Business to Support Strategy and Growth Undergoing holistic transformation to enhance strategy execution and SES’s commercial value proposition 1. Scale and globalise SES’s core 2. Build differentiated capabilities in 3. Develop a future-proof business activities Video, Fixed Data
Slide 6: Aligning Operating Model to Target Markets; and Fit-for-Growth Launched
Aligning Operating Model to Target Markets; and Fit-for-Growth Launched Building two market-centric business units with differentiated capabilities to meet clients’ evolving demands SES Video SES Networks ▲ Prime video neighbourhoods with access to vast global audience ▲ Only multi-orbit, multi-fr
Slide 7: Launching Differentiated Capabilities to Support Future Growth
Launching Differentiated Capabilities to Support Future Growth Investing in growth capabilities specifically designed for their target markets, with important customer commitments Five satellites successfully launched since 1 January 2017, further launches planned in 2018, 2019 and 2021 2017 201
Slide 8: Financial Highlights
Financial Highlights EUR million 2017 2016 Revenue 2,035.0 2,068.8 ▲ Down 1.6% as reported; -5.2% like-for-like(1) EBITDA 1,324.2 1,451.5 ▲ EBITDA margin 65.1% (2016: 66.7%(1)) ▲ Positive income tax (EUR 130.6 million) partly Net profit attributable to SES shareholders 596.1 962.7 offsetting 2016 O3
Slide 9: Full Year 2017 and Q4 2017 Revenue Development
Full Year 2017 and Q4 2017 Revenue Development Change (like-for-like(1)) EUR million FY 2017 FY 2016 FY 2017 vs. FY 2016 Q4 2017 vs. Q4 2016 SES Video 1,383.0 1,391.6 -3.6% -3.0% - Underlying(2) 1,373.2 1,366.5 -2.4% -3.4% - Periodic(3) 9.8 25.1 n/m n/m SES Networks 646.1 627.3 -1.9% -12.9% - Underl
Slide 10: SES Video
SES VIDEO Ferdinand Kayser, CEO of SES Video 10
Slide 11: SES Video - Key Highlights
SES Video - Key Highlights SES Video revenue EUR million FY 2017 revenue -3.6%(1) to EUR 1,383.0 million 1,435.0 • Q4 2017 revenue of EUR 351.5 million (-3.0%(1) YOY) 1,391.6 1,383.0 Q4 Q4 Q4 • FY and Q4 underlying development impacted by changes in 362.2 371.6 351.5 satellite health and non-renew
Slide 12: Commercial Activity Underpins Resilience of SES Video's Value Proposition
Commercial Activity Underpins Resilience of SES Video’s Value Proposition Delivering distribution and video services, supporting content anytime, and on any screen ▲ Important long-term renewal of seven transponders to serve German audiences ▲ Extending partnership in U.S. for cable clients and Ro
Slide 13: Video Distribution – Resilient Revenue and Strong Cash Flow
Video Distribution – Resilient Revenue and Strong Cash Flow Video Distribution revenue walk (FY 2017) Video Distribution revenue walk (Q4 2017) EUR million EUR million -4.9% as reported; -4.2% like-for-like(1) -5.7% as reported; -3.1% like-for-like(1) +1.4 1,107.8 (8.3)(1) (12.6) (33.1) 1,053.8 277.
Slide 14: Total TV Channels Growing 2% (YOY); HDTV Channels Up 4% (YOY)
Total TV Channels Growing 2% (YOY); HDTV Channels Up 4% (YOY) Europe North America International Number of TV channels(1) Number of TV channels(1) Number of TV channels(1) 2,962 2,670 2,754 2,664 14% 14% 29% 30% 2,120 2,077 64% 66% Q4 2016 Q4 2017 Q4 2016 Q4 2017 Q4 2016 Q4 2017 SD (~3 MHz/channel i
Slide 15: Video Services - Global Video Services Add to SES's Value Proposition
Video Services - Global Video Services Add to SES’s Value Proposition Video Services revenue walk (FY 2017) Video Services revenue walk (Q4 2017) EUR million EUR million +16.0% as reported; -1.9% like-for-like(1) -4.6% as reported; -2.6% like-for-like(1) 51.7(1) (5.9) (0.4) 329.2 94.0 (2.0)(1) Unch.
Slide 16: Strong Contract Base Underpinning Long-term Resilience of Video
Strong Contract Base Underpinning Long-term Resilience of Video SES Video contract backlog SES Video revenue EUR billion EUR million 5.9 1,383.0 (0.3) +1.1 5.3 >85% of 2018 expected (1.4) revenue contracted Q4 2016 At constant FX 2017 revenue Renewals and Q4 2017 FY 2017 FY 2018 new business ▲ EUR 1
Slide 17: SES Networks
SES NETWORKS Steve Collar, CEO of SES Networks 17
Slide 18: Key Highlights - SES Networks
Key Highlights - SES Networks SES Networks revenue EUR million Full year 2017 revenue -1.9%(1) (YOY) • Growing revenue from managed end-to-end services 658.6 646.1 627.3 • Negatively impacted by AMC-9 loss and transitioning from Q4 Q4 Q4 legacy wholesale fixed data networks 179.3 156.1 192.3 Q4
Slide 19: Building Momentum and Delivering on SES Networks Strategy
Building Momentum and Delivering on SES Networks Strategy FIXED DATA MOBILITY GOVERNMENT Multi-year, multi-gigabit core connectivity Major increase in commitment to SES-15 US DoD now committed to > 5Gbps IP transit and EPL services for Cuba Premier Americas satellite for Aero ASPs managed MEO capabi
Slide 20: Fixed Data - Growth in Managed Services Driving Revenue Stabilisation
Fixed Data - Growth in Managed Services Driving Revenue Stabilisation Fixed Data revenue walk (FY 2017) Fixed Data revenue walk (Q4 2017) EUR million EUR million +1.2% as reported; -6.0% like-for-like(1) -14.3% as reported; -8.4% like-for-like(1) +19.3(1) +6.0 Unch. 251.8 (22.3) 254.8 70.3 (4.5)(1)
Slide 21: Mobility - Underlying Revenue Growing in Aeronautical and Maritime
Mobility - Underlying Revenue Growing in Aeronautical and Maritime Mobility revenue walk (FY 2017) Mobility revenue walk (Q4 2017) EUR million EUR million +8.7% as reported (-0.1% like-for-like)(1) -45.4% as reported (-40.4% like-for-like) (1) +11.9(1) +5.3 (5.5) 145.4 56.8 133.7 (4.7)(1) (21.0) (0.
Slide 22: Government - Growing in Both U.S. and Global Government
Government - Growing in Both U.S. and Global Government Government revenue walk (FY 2017) Government revenue walk (Q4 2017) EUR million EUR million +1.7% as reported (+1.6% like-for-like) (1) -0.6% as reported (+5.5% like-for-like) (1) +3.0 +1.0 +4.2 +0.1(1) 245.9 65.2 64.8 241.8 (3.8)(1) (0.8) FY 2
Slide 23: Transforming Business to Capture Exponential Networks Demand
Transforming Business to Capture Exponential Networks Demand Building … resourcing and implementing differentiated data services ▲ First satellite-enabled services provider to achieve MEF CE 2.0 Services Certification ▲ Establishing dedicated teams focused on specific market segments (e.g. SES Globa
Slide 24: Building Momentum in Networks Contract Pipeline
Building Momentum in Networks Contract Pipeline SES Networks contract backlog SES Networks revenue EUR billion EUR million +0.9 2.3 646.1 2.2 (0.2) >75% of 2018 (0.6) expected revenue contracted Q4 2016 At constant FX 2017 revenue Renewals and Q4 2017 FY 2017 FY 2018 new business ▲ EUR 0.9 billion o
Slide 25: Financial Review
FINANCIAL REVIEW Padraig McCarthy, CFO 25
Slide 26: Financial Highlights
Financial Highlights Change (YOY) EUR million 2017 2016 Reported Like-for-like(1) Revenue 2,035.0 2,068.8 -1.6% -5.2% EBITDA 1,324.2 1,451.5 -8.8% -7.6% - EBITDA margin (like-for-like)(1) 65.1% 66.7% Operating profit 610.6 820.3 -25.6% -14.4% - Operating profit margin (like-for-like)(1) 30.0%(2) 33.
Slide 27: Revenue Down 1.6% as Reported (-5.2% like-for-like)
Revenue Down 1.6% as Reported (-5.2% like-for-like) Revenue walk EUR million Revenue -5.2% like-for-like(1) 78.8(1) SES Video: -3.6% SES Networks: -1.9% 3.5 2,147.6 (33.5) 2,068.8 (18.5) (16.0) (48.1) 2,035.0 2,035.0 Scope 99.4 Satellite health (5.9) Satellite health (12.0) FX (20.6) MX1 (14.5) Bala
Slide 28: EBITDA of EUR 1,324.2 million (2016: EUR 1,451.5 million)
EBITDA of EUR 1,324.2 million (2016: EUR 1,451.5 million) EBITDA walk EUR million EBITDA -7.6% like-for-like(1) 1,451.5 (18.7) 1,432.8 +6.0 (52.0) (12.5) (48.1) (2.0) 1,318.2 1,324.2 Scope (4.0) EBITDA FX (14.7) EBITDA EBITDA margin margin margin 70.2% 66.7% 65.1% 2016 Like-for-like 2016 Revenue Rev
Slide 29: Like-for-like Depreciation down 2.2% (+13.3% as reported)
Like-for-like Depreciation down 2.2% (+13.3% as reported) Depreciation walk -2.2% like-for-like EUR million 88.6 Underlying depreciation down 8.1% +38.4 649.1 (16.6) 635.0 (35.9) 596.6 560.5 Scope 97.2 FX (8.6) 2016 Like-for-like 2016 GEO fleet MEO fleet Underlying AMC-9 impairment 2017 (reported) a
Slide 30: Net Profit of EUR 596.1 million (2016: EUR 962.7 million)
Net Profit of EUR 596.1 million (2016: EUR 962.7 million) Net Profit Attributable to SES Shareholders EUR million 962.7 +62.4 +0.2 +244.7 596.1 (495.2) 467.5 +31.0 (209.7) 2016 Gain on deemed 2016 exc. gain on Operating profit Net financing Taxation Share of Non-controlling YTD 2017 disposal of equi
Slide 31: Favourable Tax Outcomes Driving Positive Contribution in 2017
Favourable Tax Outcomes Driving Positive Contribution in 2017 Tax income/(expense) EUR million 2017 2016 Underlying tax expense (95.4) (114.1) Reduction in U.S. deferred tax liabilities 94.4 -- U.S. tax credits 56.7 -- Recognition of tax asset in relation to withholding tax in Latin America 51.1 --
Slide 32: Free Cash Flow Before Financing and Acquisitions Up 16.2%
Free Cash Flow Before Financing and Acquisitions Up 16.2% Free Cash Flow before Financing and Acquisitions Free cash flow and CapEx development EUR million As a % of group revenue 890 39% 37% 40% 738 761 726 655 20% 22% 22% 0% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 FCF before financing an
Slide 33: Investing in Future Growth Capabilities
Investing in Future Growth Capabilities GEO-MEO Capital Expenditure (growth and replacement)(1) EUR million FY ’17 (27 Oct ‘17) 630 430 430 430 980 570 (Reduction) / Increase (138) +30 - (50) +150 (20) (2) 1,130 Total (’17-’22) 180 3,442 vs 3,470 100 588 550 492 460 64 430 83 380 80 850 310 90 90 11
Slide 34: Focusing on Strengthening the Balance Sheet
Focusing on Strengthening the Balance Sheet Net debt to EBITDA Net debt reduced by 4.2% to EUR 3,678.3 million Times (including 50% of hybrid bonds) SES threshold target: 3.3x • Weighted average interest rate(1) 3.66% (2016: 3.87%) 3.27 • Weighted average debt maturity 7.0 years (2016: 7.8 years)
Slide 35: Outlook - Completing Transformation and Executing Business Plan
Outlook - Completing Transformation and Executing Business Plan 2017 as reported 2017 2018 2020 Average EUR/USD FX rate 1.1249 1.15 1.15 1.15 SES Video EUR 1,383 million EUR 1,373.7 million EUR 1,300 - 1,320 million Over EUR 1,350 million SES Networks EUR 646 million EUR 632.0 million EUR 660 - 690
Slide 36: Looking Forward
LOOKING FORWARD Steve Collar, President & CEO Designate 36
Slide 37: Well Placed to Serve Our Customers
Well Placed to Serve Our Customers ▲ Fleet covers 99% of the world with 99.99% reliability Global and scalable business ▲ ▲ Only multi-orbit, multi-frequency satellite-enabled services provider Extensive global terrestrial network and partnerships Differentiated ▲ Prime video neighbourhoods with a
Slide 38: Strategy and Organisation Now in Place to Support Execution
Strategy and Organisation Now in Place to Support Execution SES’s Financial Model ▲ SES Video highly profitable and resilient Strategy in place ▲ Revenue growth driven by SES Networks • Lower EBITDA margin driven by delivery of end-to-end solutions and additional headcount Transformation to new •
Slide 39: Disclaimer
Disclaimer This presentation does not, in any jurisdiction, including without limitation in the U.S., constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, or any investment advice in connection with, any securities of SES, nor should
Slide 40: Investor Relations Contact
Richard Whiteing Investor Relations richard.whiteing@ses.com T +352 710 725 261 M +352 691 898 956 Connect with us 40