Inmarsat — FY2010 Earnings Presentation
29 slides from Inmarsat's earnings presentation, Mar 7, 2011
Slide 1: Q4 & preliminary full year results 2010
Inmarsat plc Q4 & preliminary full year results 2010 7 March 2011 The mobile satellite company TM
Slide 2: Forward-looking statements
Forward-looking statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual result
Slide 3: Full year results 2010
Full year results 2010 Andrew Sukawaty Chairman & Chief Executive Officer The mobile satellite company TM
Slide 4: 2010 financial highlights
2010 financial highlights Total revenue up 12.9% to $1,171.6m (2009: $1,038.1m) • Inmarsat Global revenue up 10.0% to $764.1 (2009: $694.8m) EBITDA up 17.1% to $696.1m (2009: $594.2m) • Inmarsat Global EBITDA up 15.6% to $572.8m (2009: $495.5m) Operating profit up 29.1% to $460.6m (2009: $356.8m) EP
Slide 5: Inmarsat Global – MSS revenue
Inmarsat Global – MSS revenue US$m +6.5% 800 $727.0 $682.8 700 111.7 103.5 Leasing +7.9% 600 75.8 Aero +33.2% 101.0 500 146.5 Land +4.9% 153.7 400 300 200 Maritime +1.0% 357.0 360.6 100 0 FY 2009 FY 2010 5
Slide 6: Inmarsat plc – 5-year EBITDA record
Inmarsat plc – 5-year EBITDA record US$m +17.1% 800 $696 700 $594 600 $531 500 $388 400 $332 300 200 100 0 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 6
Slide 7: Total dividends
Total dividends 36.69 cents US$ cents 33.36 cents +10.0% 25 22.69 20.63 20 15 14.00 12.73 10 5 Interim Final Interim Final 0 FY 2009 FY 2010 7
Slide 8: 2010 operational achievements
2010 operational achievements Commitment to Inmarsat-5 and Global Xpress investment programme to address incremental opportunities Handheld strategy implemented with launch of global handheld service, IsatPhone Pro LightSquared Cooperation Agreement triggered, realising value after 3 years of work o
Slide 9: Outlook for 2011
Outlook for 2011 Confident in growth prospects and 5-year growth target Multiple growth opportunities remain ahead Material new revenue and profit resulting from Cooperation Agreement with LightSquared Near term core business trends will constrain core MSS revenue growth to 2% – 4% in 2011 Investmen
Slide 10: Q4 & full year results 2010
Q4 & full year results 2010 Rick Medlock Chief Financial Officer The mobile satellite company TM
Slide 11: Inmarsat plc - 2010 full year results
Inmarsat plc - 2010 full year results Financial year US$m 2010 2009 Revenue 1,171.6 1,038.1 12.9% Operating costs (475.5) (443.9) (7.1%) EBITDA 696.1 594.2 17.1% Depreciation & amortisation (234.6) (231.6) Other (0.9) (5.8) Operating profit 460.6 356.8 29.1% Net interest payable (127.1) (159.9) Prof
Slide 12: Inmarsat plc - 2010 cash flow
Inmarsat plc - 2010 cash flow Financial year US$m 2010 2009 EBITDA 696.1 594.2 17% Working capital/non-cash items 89.7 51.6 Operating cash flow 785.8 645.8 Capital expenditure (180.7) (162.8) Cash interest (92.0) (109.6) Cash tax (42.8) (24.6) Free cash flow 470.3 349.0 35% 12
Slide 13: Inmarsat plc – net debt
Inmarsat plc – net debt 1,600 $1,102 $644m of available liquidity 1,400 Convertible through cash and bank Bond 2017 $288 1,200 facilities 1,000 Legacy Stratos debt Senior Notes refinanced in 2010 US$m Due 2017 800 $650 New 8-year EIB Facility 600 fully drawn 400 EIB Facility $308 New US Ex-Im Bank 2
Slide 14: Inmarsat Global Ltd - Q4 MSS revenue
Inmarsat Global Ltd - Q4 MSS revenue US$m +1.2% 200 $176.9 $179.0 180 160 27.4 Leasing -6.6% 25.6 140 20.6 Aero +17.5% 24.2 120 37.7 Land +0.5% 37.9 100 80 60 Maritime +0.1% 40 91.2 91.3 20 0 Q4 2009 Q4 2010 14
Slide 15: Maritime sector
Maritime sector Over 10,000 FleetBroadband US$m 66.6 70 65.5 terminals added in 2010 60 Data growth constrained by speed of FleetBroadband take 50 up as traffic re-priced to lower 40 tariffs 30 25.7 24.7 Voice usage impacted by email 20 substitution and increased competition 10 Some increasing compe
Slide 16: Land mobile sector
Land mobile sector BGAN up 6% year over year and 40.0 US$m up 3% sequentially 35.7 36.0 • 1,738 terminals added in quarter 35.0 • ARPU steady at $200 per month 30.0 • No identified event revenues 25.0 Lower revenue levels from 20.0 Afghanistan are being replaced 15.0 with more BGAN organic growth 10
Slide 17: Aeronautical & Leasing
Aeronautical & Leasing Aero revenue up 17.5% US$m 30 27.4 SwiftBroadband terminal sales 24.2 25.6 strong, our leading aero service 25 20.6 Lower cost SwiftBroadband 200 20 developed/launched 15 Government aero usage levels down, suppressed by lower regional 10 activity and emerging budgetary constra
Slide 18: Stratos – Q4 results
Stratos – Q4 results 200 US$m +4.9% Inmarsat MSS revenues 180 impacted by: 160 Broadband 22.2 +80.6% 40.1 • Pricing pressure in distribution 140 channel 34.6 Other MSS 120 -15.3% 29.3 • Factors consistent with Inmarsat Global Q4 100 Other MSS reduced by lower 80 Inmarsat traffic from other networks
Slide 19: Inmarsat plc – financial summary
Inmarsat plc – financial summary EBITDA growth ahead of revenue growth Profit before tax up 69% to $333.5m Free cash flow up 35% to $470.3m Significant cash inflows from Cooperation Agreement 2010 dividend increased by 10%, covered 1.6x Strong liquidity and low debt leverage 19
Slide 20: Strategy and operations review
Strategy and operations review Andrew Sukawaty Chairman & Chief Executive Officer The mobile satellite company TM
Slide 21: 2011 priorities – a key year ahead
2011 priorities – a key year ahead Core MSS market initiatives to improve growth rate and continue market leadership Develop market proposition for IsatPhone Pro and build on early positive market feedback Contract planned capital investments and assemble full team to deliver Global Xpress on budget
Slide 22: MSS maritime initiatives
MSS maritime initiatives Consolidate on FleetBroadband’s leading market position • New pricing plans to ensure attractiveness relative to VSAT plans • Inmarsat-B to FleetBroadband migration promotions to lock-in shipping fleets considering upgrades • Communicate future service proposition of integra
Slide 23: MSS land initiatives
MSS land initiatives BGAN is growing well, but fluctuates with government user activity Introduce geographic pricing to change value proposition in markets where opportunity large, but existing usage low Penetrate next tier of media and news gathering organisations Satellite Low Data Rate New produc
Slide 24: IsatPhone Pro
IsatPhone Pro Strong positive market reaction to service launch Retail handset price from $499, well below competitive offerings A number of pricing packages launched Strong initial orders and good manufacturing performance, despite global component shortages in early phase Not material in 2010, a g
Slide 25: MSS aeronautical initiatives
MSS aeronautical initiatives SwiftBroadband now our leading aeronautical product and strong new terminal activations are continuing SwiftBroadband 200 available to target untapped market opportunity in small business jets In-flight passenger connectivity remains at an early stage of roll-out but ret
Slide 26: The impact of LightSquared
The impact of LightSquared Phase 1 and Phase 2 now triggered Cash payments received to date: Significant new revenue and Phase 1 = $192.5m profitability ahead Phase 2 = $20.1m Cash inflows well ahead of accounting revenue recognition Total = $212.6m and cash costs Confident on managing Revenue recog
Slide 27: Inmarsat-5 - Global Xpress
Inmarsat-5 - Global Xpress Satellite manufacture underway iDirect selected for ground network and core module Sea Tel selected for terminal development Key personnel appointments On track for commercial service in 2013, global service by end 2014 Strong market interest in service capability and dist
Slide 28: Summary
Summary Another strong year completed, 5-year targets outperformed at revenue and EBITDA Retain 5-7% medium term average growth rate target New growth opportunities becoming reality, IsatPhone Pro and LightSquared Cooperation Agreement Commitment to Global Xpress for incremental market opportunities
Slide 29: Questions & Answers
Questions & Answers Inmarsat plc Q4 & preliminary full year results 2010 7 March 2011 www.inmarsat.com The mobile satellite company TM