Eutelsat Communications Sa · EURONEXT:ETL
Eutelsat Communications Sa — FY2021-22 Earnings Presentation
34 slides from Eutelsat Communications Sa's earnings presentation, Jul 26, 2022
Slide 1: Full Year 2021-22 Results
FULL YEAR 2021-22 RESULTS 26 July 2022
Slide 2: Disclaimer
DISCLAIMER The audit procedures for the consolidated financial statements have been completed. The certification report will be issued at the end of the next Board of Directors' meeting, after completion of the specific verifications and review of events after 25 July 2022. These accounts will be su
Slide 3: Agenda
AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 3
Slide 4: Highlights
HIGHLIGHTS Operating Verticals revenues slightly above the mid-point of our range of objectives Resilient financial performance including industry-leading profitability and ongoing robust Free Cash Flow generation Putting all elements in place to foster the Telecom Pivot Closer cooperation with OneW
Slide 5: Key Figures
KEY FIGURES YoY change As per financial Reported objectives definition OPERATING VERTICALS €1,148m at reported €/$ rate REVENUES -4.4% -3.8%1 €1,122m at 1.20 €/$ rate EBITDA MARGIN2 74.8% reported +0.1 pt CASH CAPEX2 €280m DISCRETIONARY €443m reported FREE CASH FLOW2 €460m adjusted (as per financial
Slide 6: Sequential trends improving throughout the year
SEQUENTIAL TRENDS IMPROVING THROUGHOUT THE YEAR Q4 revenues slightly up vs Q3 QoQ like-for-like variation Q1 Q2 Q3 Q4 BROADCAST -1.7% -3.1% -0.8% -0.4% DATA & PROFESSIONAL -6.2% +1.4% +0.1% -1.1% VIDEO GOVERNMENT -3.2% -2.0% -8.0% -0.1% SERVICES FIXED BROADBAND -2.6% +5.9% +7.7% +26.0%* MOBILE CONNE
Slide 7: >€2.2bn aggregated DFCF generated over 5 years
>€2.2BN AGGREGATED DFCF GENERATED OVER 5 YEARS Reported DFCF / 29% 31% 37% 38% 38% revenue ratio Incl. €86m 1,408 of E5WB 1,321 1,278 insurance proceeds 1,234 1,152 415 408 474 467 443 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 Total revenues Reported Discretionary Free Cash Flow Adjuste
Slide 8: All elements in place to foster Telecom Pivot
ALL ELEMENTS IN PLACE TO FOSTER TELECOM PIVOT MARKET OPPORTUNITY • Massive long-term market potential for both B2C and B2B connectivity INNOVATIVE END-TO- END PLATFORM • Successful launch of Eutelsat Advance managed services solutions ADEQUATE ORGANISATION • Reorganization along two business lines t
Slide 9: Massive opportunity for both B2B and B2C connectivity
MASSIVE OPPORTUNITY FOR BOTH B2B AND B2C CONNECTIVITY Addressing multiple verticals worth almost $16bn VERTICALS KEY APPLICATIONS DRIVERS 2030 MARKET 10Y-CAGR Network extension Mobile backhaul Growing Data usages FIXED DATA 1 Corporate networks Ubiquitous coverage need $3.9bn +10% USO pr
Slide 10: Successful launch of Eutelsat Advance platform
SUCCESSFUL LAUNCH OF EUTELSAT ADVANCE PLATFORM INNOVATIVE SPECIFIC OFFERS PROMISING END-TO-END MANAGED SERVICES SOLUTION ADDRESSING ALL B2B VERTICALS COMMERCIAL START Extension to more verticals and Flexible solutions in-orbit resources On-demand service plans and bandwidth Managed connectivity
Slide 11: Reorganisation along two business units
REORGANISATION ALONG TWO BUSINESS UNITS Enhancing customer-centricity, gaining efficiency and fostering return to growth CONTEXT NEW ORGANISATION AND EXPECTED BENEFITS TIMING We are exposed to 2 different Creation of two Business Units in Improved customer-centricity and markets with distinct
Slide 12: Substantial growth capacity to progressively support topline
SUBSTANTIAL GROWTH CAPACITY TO PROGRESSIVELY SUPPORT TOPLINE INCREMENTAL KEY ENTRY INTO FIRM CAPACITY MARKETS SERVICE* COMMITMENTS EUTELSAT 65 Ka spots Broadband In service since Q4 2020 KONNECT 75 Gbps Europe/Africa EUTELSAT 8 “QUANTUM” Government Multiple beams sold In service since Q4 2021 QUANTU
Slide 13: Closer links with OneWeb
CLOSER LINKS WITH ONEWEB OneWeb operations progressing well despite Russian headwind OPERATIONAL UPDATE CLOSER COOPERATION 13 launches completed with 2/3 of the fleet now Investment closed with a further strengthening of the in orbit initial stake making Eutelsat OneWeb’s second largest sharehol
Slide 14: Agenda
AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 14
Slide 15: FY 2021-22 Revenues
FY 2021-22 REVENUES Total revenues of €1,152 down 6.7% FY 22 Y-o-Y revenue bridge (€m) Negative perimeter effect -3.8% • Acquisition of BBB on 1st October 2020 • Disposal of EBI on 30 April 2021 Positive currency effect +22 (31) (29) (44) • €/$ rate of 1.14 vs 1.19 last year 1,234 1,152 Nega
Slide 16: FY 2021-22 Revenues by Application
FY 2021-22 REVENUES BY APPLICATION REVENUE REVENUES LIKE-FOR-LIKE2 CONTRIBUTION1 (€m) CHANGE BROADCAST 61% 697 -6.9% DATA & 14% PROFESSIONAL 159 -4.2% VIDEO GOVERNMENT 12% SERVICES 144 -7.9% FIXED BROADBAND 6% 69 +36.0% MOBILE CONNECTIVITY 7% 80 +15.0% TOTAL OPERATING VERTICALS 1,148 -3.8% OTHER REV
Slide 17: Broadcast
BROADCAST 61% 741 697 FY revenues of €697m, down 6.9% YoY like-for-like1 • Partial renewal of capacity with Nilesat at 7/8°W • Lower revenues in Europe in H1 due to the carry-forward Q4 180 174 Q4 effect of a slowdown in the pace of new business during the Covid period Q3 182 173 Q3 Q4 revenues
Slide 18: Data & Professional Video
DATA & PROFESSIONAL VIDEO 14% FY revenues of €159m, down 4.2% like-for-like1 161 159 • Trend broadly in keeping with the previous FY Fixed Data Q4 41 41 Q4 • Higher volumes partly offsetting continued double-digit price pressure Q3 40 40 Q3 Professional Video • Still in structural decline Q2 4
Slide 19: Government Services
GOVERNMENT SERVICES 12% FY revenues of €144m, down 7.9% like-for-like1 • Negative effect of USG renewals with a ~75% renewal rate 151 144 over the FY ➢ Withdrawal from Afghanistan • End of life in stable orbit of E174A Q4 38 36 Q4 • Initial incremental revenues secured on ETL QUANTUM Q3 37 35 Q3
Slide 20: Fixed Broadband
FIXED BROADBAND 6% FY revenues of €69m, up 36.0% like-for-like1 80 69 • Wholesale agreements with Orange, TIM and Hispasat (from Nov. 21) Q4 18 • Strong dynamic of our African operations 22 Q4 • Ramp-up of the multi-beam agreement signed on E65WA with Q3 21 several Mexican service providers 17 Q3
Slide 21: Mobile Connectivity
MOBILE CONNECTIVITY 7% FY revenues of €80m, up 15.0% like-for-like1 80 • Ongoing strong growth of Maritime driven by ramp-up of contracts 67 secured in previous years • Agreement on ETL QUANTUM with a customer in the Middle East 23 Q4 • Carry-forward effect of Anuvu contract signed last year Q4 18
Slide 22: Backlog & Fill Rate
BACKLOG & FILL RATE BACKLOG (€BN) OPERATIONAL & UTILIZED TRANSPONDERS Fill rate 71.2% 73.2% 4.4 4.0 1,377 1,361 981 996 Operational Transponders Broadcast 64% 62% Utilized Transponders 30 June 2021 30 June 2022 30 June 2021 30 June 2022 • 3.5 years of revenues • Operating TPE down 16 units • Broadca
Slide 23: Agenda
AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 23
Slide 24: Profitability
PROFITABILITY FY 22 EBITDA margin of 74.8% stable YoY EBITDA (€m) • Lower revenues 922 862 Lower Opex • Favorable effect of changes of perimeter • Lower Bad Debt • Continued strict cost discipline in the legacy business Margin 74.7% 74.8% 77.4 77.4 77.5 LEAP 2: €24m savings in FY 22 being achi
Slide 25: Net Income
NET INCOME Extracts from the FY FY consolidated income CHANGE statement in €m 2020-21 2021-22 Revenues 1,234 1,152 -6.7% EBITDA1 922 862 -6.5% ► Lower D&A reflecting notably KA-SAT disposal Operating income 347 425 +22.3% ► FY 22 Other operating income reflecting C-band proceeds (phase 1) partly off
Slide 26: Discretionary Free Cash Flow
DISCRETIONARY FREE CASH FLOW In €m 460 FX, Hedging & one-offs 17 related to LEAP 2 and to (280) HQ move 801 (78) 1 (1) 443 1 Net Cash Flow from Cash Capex Interest and Other fees paid Discretionary Free Cash Flow operations net of interests received YoY Change in -10 Adjusted DFCF YoY Change in Repo
Slide 27: Net Debt Evolution
NET DEBT EVOLUTION In €m +€159m (86) +80 (108) +495 (443) 2,814 2,655 +222 Net Debt as of Reported Dividend Equity C-band net of Fair value of Other Net Debt as of 30/06/21 DFCF investments taxes Cross-Currency 30/06/2022 Swap 27
Slide 28: Financial Structure
FINANCIAL STRUCTURE Net Debt/EBITDA ratio of 3.27x NET DEBT / EBITDA RATIO • Versus 2.88x as of 30 June 2021 • Phase 2 of C-Band proceeds now expected in FY 23 3.27 Average cost of debt after hedging of 2.55% 2.88 • Versus 2.4% in FY 21 Average weighted maturity of 4.3 years • Versus 5.0 y at
Slide 29: Agenda
AGENDA 1. Highlights 2. Operational performance 3. Financial performance 4. Outlook 29
Slide 30: A Three-Pillar Strategy
A THREE-PILLAR STRATEGY Relying on a strong foundation Eutelsat Telecom pivot Maximize cash generation of Deliver GEO-enabled growth Further develop legacy business in Connectivity collaboration with OneWeb ➢ To fund our transition towards ➢ In Fixed Broadband via ➢ To capture LEO-enabled high growt
Slide 31: FY 2022-23: Revenue Trends by Application
FY 2022-23: REVENUE TRENDS BY APPLICATION ➢ Carry forward-effect of the partial renewal with Nilesat washing out from mid-October 2022 BROADCAST ➢ Non-renewal of the agreement with Digitürk ➢ Revenue trend to materially improve vs FY 22 with FY 23 expected in mid-single digit decline ➢ Ongoing struc
Slide 32: Financial Outlook
FINANCIAL OUTLOOK ► Between €1,150 to €1,180m in FY 2022-231 OPERATING VERTICALS ► Growth from FY 2023-24 REVENUES1 ► Not exceeding €400m2 per annum for each CASH CAPEX of the next two fiscal years (FY 2022-23 / FY 2023-24) ► Average of €420m per year over the next ADJUSTED DISCRETIONARY two fiscal
Slide 33: Appendix
APPENDIX @ eutersat
Slide 34: Future Launches
FUTURE LAUNCHES EUTELSAT 10B EUTELSAT KONNECT EUTELSAT EUTELSAT 36D NAME HOTBIRD 13G VHTS HOTBIRD 13F Orbital 10° East 13° East TBD 13° East 36° East Position Approx . Entry into service Q3 2023 H1 2023 H2 2023 Q2/Q3 2023 H2 2024 date1 Manufacturer Coverage EMEA, Atlantic & Europe Europe Europe Afri
Eutelsat Communications — FY2021-22 Earnings Presentation on 6ix