Eutelsat Communications Sa · EURONEXT:ETL

Eutelsat Communications Sa — FY2020-21 Earnings Presentation

37 slides from Eutelsat Communications Sa's earnings presentation, Jul 30, 2021

  1. Slide 1: Full Year 2020-21 Results

    FULL YEAR 2020-21 RESULTS 30 July 2021

  2. Slide 2: Disclaimer

    DISCLAIMER This document contains figures from audited consolidated financial statements prepared under IFRS, reviewed by the Audit Committee on 28 July 2021 and adopted by the Board of Directors of Eutelsat Communications on 29 July 2021. These accounts will be subject to the approval of shareholde

  3. Slide 3: Agenda

    AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 3

  4. Slide 4: Highlights

    HIGHLIGHTS Operating verticals revenues at the top end of the upgraded range of objectives Robust financial performance despite tough external • context Strong commercial performance with growing backlog • representing 3.5 years of revenues Ramp up of Fixed Broadband strategy with significant • acce

  5. Slide 5: Key Figures

    KEY FIGURES Y-o-y change As per financial Reported objectives definition OPERATING VERTICALS €1,201m at reported €/$ rate REVENUES -5.9% -3.3%1 €1,220m at 1.14 €/$ rate EBITDA MARGIN2 74.7% reported -2.4 pts CASH CAPEX2 €342m DISCRETIONARY €467m reported FREE CASH FLOW2 €498m adjusted (as per financ

  6. Slide 6: >€2.4bn aggregated DFCF generated over 6 years

    >€2.4BN AGGREGATED DFCF GENERATED OVER 6 YEARS Reported DFCF / 16% 28% 29% 31% 37% 38% revenue ratio Incl. €86m 1,529 1,478 1,408 of E5WB 1,321 1,278 insurance proceeds 1,234 408 415 408 474 467 247 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Total revenues Reported Discretiona

  7. Slide 7: Strong commercial performance with backlog growth

    STRONG COMMERCIAL PERFORMANCE WITH BACKLOG GROWTH Broadcast Fixed Data  Renewal with Sky Italia highlighting the  Multiple deals with new or expanded long-term resilience of European Pay-TV capacity  Incremental capacity for Multichoice Fixed Broadband Government Services  Wholesale agreement wi

  8. Slide 8: Ramp up of Fixed Broadband strategy

    RAMP UP OF FIXED BROADBAND STRATEGY Entry into service of EUTELSAT KONNECT with full coverage now available over Europe and Africa AFRICA: EUROPE: MULTIPLE DEALS PROGRESS IN TWO-PILLAR APPROACH STRENGHTENING DISTRIBUTION NETWORK Wholesale Retail  South Africa: Wholesale  Wholesale agreements  Acq

  9. Slide 9: Strategic foothold in LEO through OneWeb

    STRATEGIC FOOTHOLD IN LEO THROUGH ONEWEB Attractive entry point to considerable LEO opportunity: $550m for 19.3% stake in • a fully funded growth asset just ahead of start of commercial rollout OneWeb ideally positioned to be among the winners in NGSO landscape thanks to strong • spectrum rights, fi

  10. Slide 10: OneWeb gaining operational traction

    ONEWEB GAINING OPERATIONAL TRACTION  Continued rollout of the constellation • 254 satellites now in orbit with 4 launches completed YTD • Service demonstrations starting this summer in several key locations • Partial entry into service by calendar year-end  Gen-1 funding completed • $500m Investme

  11. Slide 11: Well on track for C-Band proceeds in FY 22

    WELL ON TRACK FOR C-BAND PROCEEDS IN FY 22  Eutelsat eligible for $507m accelerated relocation payments • Phase 1 (portion of the spectrum): $125m to be completed by 12/2021 • Phase 2 (full 300 Mhz spectrum): $382m to be completed by 12/2023  Transition plan based on simplified migration secures e

  12. Slide 12: Agenda

    AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 12

  13. Slide 13: FY 2020-21 Revenues

    FY 2020-21 REVENUES  Total revenues of €1,234m, down -3.5% FY 21 Y-o-Y revenue bridge (€m)  Broadly neutral perimeter effect -3.3% • Consolidation of BBB Europe (1st October 2020) • Disposal of EBI (30 April 2021) +31  Negative currency effect (33) (42) • €/$ rate of 1.188 vs 1.105 last year 1 27

  14. Slide 14: FY 2020-21 Revenues by Application

    FY 2020-21 REVENUES BY APPLICATION REVENUE REVENUES LIKE-FOR-LIKE2 CONTRIBUTION1 (€m) CHANGE BROADCAST 62% 741 -4.2% DATA & 13% PROFESSIONAL 161 -3.7% VIDEO GOVERNMENT 13% SERVICES 151 +0.0% FIXED BROADBAND 7% 80 +7.1% MOBILE CONNECTIVITY 5% 67 -8.4% TOTAL OPERATING VERTICALS 1,201 -3.3% OTHER REVEN

  15. Slide 15: Broadcast

    BROADCAST 62%  FY revenues of €741m, down 4.2% like-for- like1 • Impact of Forthnet contract renegotiation 785 741 • Lower revenues in Europe with slowdown in pace of new business affecting notably resellers  Q4 revenues broadly stable QoQ excluding Fransat Q4 196 Q4 180  7,006 channels at end Ju

  16. Slide 16: Data & Professional Video

    DATA & PROFESSIONAL VIDEO 13%  FY revenues of €161m, down 3.7% like-for-like1 • Considerably improved trend compared to previous years  Fixed Data 175 161 • Improving volumes largely offsetting persistent price pressure  Professional Video Q4 43 41 Q4 • Still in structural decline • Q3 45 Recover

  17. Slide 17: Government Services

    GOVERNMENT SERVICES 13%  FY revenues of €151m, stable like-for-like1 • Carry-forward effect of the past 18 months USG renewals • Positive one-off in Q4 FY20 from temporary 161 151 relocation of ETL 7A • New business and contribution of EGNOS payload on ETL 5 WEST B Q4 43 38 Q4  Q4 revenues down 4.

  18. Slide 18: Fixed Broadband

    FIXED BROADBAND 7%  FY revenues of €80m, up 7.1% like-for-like1 • Initial revenues generated by Konnect Europe with start of wholesale contracts with Orange and TIM 77 80 • Growth at African operations  Q4 revenues up 34.8% YoY and 16.4% QoQ2 18 Q4 Q4 19  Significant milestones achieved • Entry i

  19. Slide 19: Mobile Connectivity

    MOBILE CONNECTIVITY 5%  FY revenues of €67m, down 8.4% like-for-like1  Impact of Covid-19 crisis on aero mobility 79 67 • Lower airtime-related revenues on KA-SAT • Lower revenues from certain service providers Q4 17  Positive performance in maritime 18 Q4 • Ramp-up of contracts signed in last co

  20. Slide 20: Launch of 'Eutelsat Advance'

    LAUNCH OF ‘EUTELSAT ADVANCE’ Innovative end-to-end managed services addressing Connectivity verticals GLOBAL ADVANCED SEAMLESS USER FLEXIBLE PARTNERSHIP ECOSYSTEM TECHNOLOGIES EXPERIENCE WITH NO BARRIERS OF SERVICES & TOOLS & SUPPORT to ENTRY → Global network that seamlessly → Integrated state-of-th

  21. Slide 21: Backlog & Fill Rate

    BACKLOG & FILL RATE BACKLOG (€BN) OPERATIONAL & UTILIZED TRANSPONDERS +7%1 Fill rate 69.7% 71.2% 4.4 4.1 1,376 1,377 960 981 Operational Transponders Broadcast 68% 64% Utilized Transponders 30 June 2020 30 June 2021 30 June 2020 30 June 2021 • 3.5 years of revenues • Operating TPE almost unchanged •

  22. Slide 22: Agenda

    AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 22

  23. Slide 23: Profitability

    PROFITABILITY  FY 21 EBITDA margin of 74.7% down 2.4 EBITDA (€m) points YoY • Lower revenues 985 • Dilutive impact of the consolidation of BBB Europe 922 • Specific Bad Debt headwind related mostly to Mobile connectivity customers in Covid-crisis context Margin 77.1% 74.7%  Continued cost discipli

  24. Slide 24: Net Income

    NET INCOME Extracts from the FY FY consolidated income CHANGE statement in €m1 2019-20 2020-21 Revenues 1,278 1,234 -3.5% EBITDA2 985 922 -6.4% ► Lower D&A reflecting notably KA-SAT disposal Operating income 490 347 -29.2% ► FY 21 Other operating income reflecting HQ move, LEAP 2 plan, M&A activity

  25. Slide 25: Discretionary Free Cash Flow

    DISCRETIONARY FREE CASH FLOW In €m 498 FX, Hedging & one-offs related to LEAP 2 and to 31 HQ move 889 (342) 1 (80) (1) 467 Net Cash Flow from Cash Capex (1) Interest and Other fees paid Discretionary Free Cash Flow operations net of interests received YoY Change in +1 Adjusted DFCF +53 (excl. Insura

  26. Slide 26: Further decrease in net debt

    FURTHER DECREASE IN NET DEBT In €m -€344m (467) +15 (34) (63) +205 2,999 2,655 Net Debt as of Reported Dividend Equity Fair value of Other Net Debt as of 30/06/20 DFCF investments Cross-Currency 30/06/21 Swap 26

  27. Slide 27: Financial Structure

    FINANCIAL STRUCTURE NET DEBT /  Net Debt/EBITDA ratio of 2.88x vs. 3.05x as EBITDA RATIO of 30 June 2020 • Improvement vs previous year 3.05 2.88 • Comfortably in line with medium-term target  Solicited investment grade ratings confirmed 77.4 77.4 77.5  Several successful financing operations dur

  28. Slide 28: Optimization of Debt Structure

    OPTIMIZATION OF DEBT STRUCTURE Successful Improved financing operations KPIs  Issuance of €600m Eurobond with 8-year maturity  Improved average weighted maturity of 5.0 years and 1.5% coupon • vs 3.4 y at 30 Jun 2020  New €200m 8-year EIB term loan to finance KONNECT VHTS at compelling terms  Av

  29. Slide 29: Agenda

    AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 29

  30. Slide 30: Reminder: a two-pronged strategy

    REMINDER: A TWO-PRONGED STRATEGY 1. MAXIMISE 2. DELIVER GROWTH IN CASH GENERATION CONNECTIVITY VERTICALS OF THE HERITAGE BUSINESSES Funding our transition towards • GEO-enabled: in Fixed Broadband • high growth verticals… via KONNECT and KONNECT VHTS and in other applications via selected investment

  31. Slide 31: Key priorities for FY 2021-22

    KEY PRIORITIES FOR FY 2021-22 ► Fully deliver on LEAP 2 cost savings plan ► Maintain all other levers of Free Cash Flow generation under 1. MAXIMISE CASH GENERATION OF THE tension HERITAGE BUSINESS ► Secure C-Band proceeds in FY 22 ► Commercialise EUTELSAT QUANTUM ► Secure further large wholesale ag

  32. Slide 32: FY 2021-22: Revenue trends by application

    FY 2021-22: REVENUE TRENDS BY APPLICATION BROADCAST ➢ Carry forward-effect of the slowdown in new business prevalent during most of FY 21 ➢ Overall direction expected to be broadly similar to FY 2020-21 with improving trends thereafter ➢ Ongoing structural pressure in Professional Video DATA & PROFE

  33. Slide 33: Substantial growth capacity to progressively support topline

    SUBSTANTIAL GROWTH CAPACITY TO PROGRESSIVELY SUPPORT TOPLINE INCREMENTAL KEY LAUNCH ENTRY INTO FIRM CAPACITY MARKETS DATE* SERVICE* COMMITMENTS EUTELSAT 65 Ka spots Broadband Launched Q4 2020 KONNECT 75 Gbps Europe/Africa Jan. 19 EUTELSAT 8 “QUANTUM” Government To be launched Q4 2021 QUANTUM beams F

  34. Slide 34: Financial Outlook

    FINANCIAL OUTLOOK ► Between €1,110 to €1,150m in FY 2021-221 OPERATING VERTICALS ► Growth from FY 2022-23 with an REVENUES1 acceleration in FY 2023-24 ► Not exceeding €400m2 per annum for each CASH CAPEX of the next three fiscal years (FY 2021-22 / FY 2022-23 / FY 2023-24) ADJUSTED ► Between €400m a

  35. Slide 35: To Sum Up

    TO SUM UP Record high Adjusted DFCF in FY 21and FY 22 objective • raised by €30m Well-covered recommended dividend of €0.93 per share, up • 5% representing a 9% yield • Tangible acceleration in Fixed Broadband FY 22 the last year of transition, with revenues and adjusted • DFCF set to grow from FY 2

  36. Slide 36: Appendix

    APPENDIX @ eutersat

  37. Slide 37: Future Launches

    FUTURE LAUNCHES EUTELSAT KONNECT EUTELSAT EUTELSAT 10B EUTELSAT 36D NAME HOTBIRD 13F VHTS HOTBIRD 13G Orbital 48°East 13° East TBD 13° East 10° East 36° East Position Approx . 30 July H1 2022 H1 2022 H1 2022 H2 2022 H1 2024 Launch date1 Manufacturer Launcher TBD TBD TBD TBD Coverage Flexible Europe

Eutelsat Communications — FY2020-21 Earnings Presentation on 6ix