Inmarsat — Investor Presentation (June 2014)
22 slides from Inmarsat's investor presentation, June 2014
Slide 1: Corporate Presentation
Corporate Presentation Inmarsat plc June 2014
Slide 2: Business Overview
Business Overview Market leader in MSS today moving into VSAT markets Mobile Satellite Services (MSS) VSAT ‘Global Xpress’ Services Today: Tomorrow: ! Market leader ! Entering established markets ! Global coverage, L-‐band ! Global coverage, Ka-‐band ! Mission cri6cal customer needs ! Future proof
Slide 3: MSS markets
MSS markets Maritime ! 57% of MSS revenue (1) ! 190,000 subscribers ! Market leader in all sectors ! Drivers: Ship management Automa6on cost savings ! Mission cri<cal remote Crew welfare / access connec<vity Smaller vessel adop6on ! Safety services Land Mobile ! 17% of MSS revenue ! 172,000 subscrib
Slide 4: High barriers to entry
High barriers to entry Multiple challenges for any new entrant Scale needed to build a global network and fund Capital replacement satellites Uniform global spectrums rights now extremely Spectrum Rights challenging to secure and retain Orbital loca6ons can take years to secure and Orbital Slots may
Slide 5: Network and route to market
Network and route to market Established model for existing and future services Inmarsat Global Satellite Inmarsat-‐4 satellites Inmarsat-‐5 satellites Life<mes to 2023 Life<mes to 2028 Network MSS services Services VSAT services PorXolio Inmarsat Solu<ons Inmarsat Inmarsat Inmarsat Direct and Mari
Slide 6: High-quality end customer base
High-quality end customer base Government / Military Enterprise Maritime International Aid Supplying mission-critical applications to a diverse end user base 6
Slide 7: Global Xpress overview
Global Xpress overview ! Global coverage complete in 2014 ! Future proof global MSS franchise ! Expansion of ac<vi<es into established, Global 3 satellites coverage growing adjacent VSAT markets Ka-band 2014 ! $1.9bn established market opportunity ! Significant capacity pre-‐commitments $1.6bn $1.9b
Slide 8: Our Strategy
Our Strategy Operational progress matched by commercial readiness ! L-band growth via ! Empower a high-value solutions Inmarsat-4, Alphasat & ecosystem centred on Inmarsat Inmarsat-6 ! Reorganised for proximity, ! Further growth & diversity via agility & efficiency Inmarsat-5 & GX Solutions Ecosyste
Slide 9: Global Xpress market opportunity
Global Xpress market opportunity Adjacent established markets with growth 2008 - $1.4bn* 2010 - $1.9bn* Maritime Maritime VSAT Space VSAT Space Segment Segment Energy $145m $135m VSAT Space Energy (8%) (10%) Segment VSAT Space $168m Segment US DoD, (9%) US DoD, $152m ROW Gov't ROW Gov't, (11%) comme
Slide 10: Further growth options: M2M Services
Further growth options M2M Services ! High growth market opportunity >$250m ! Strategic partnerships with SkyWave and ORBCOMM ! Suited to L-‐band network ! Compe<tor market share opportunity ! Significant product development completed 10
Slide 11: Further growth options: In-flight Connectivity
Further growth options In-flight Connectivity GX Avia<on will provide speeds of up to 49 Mbps to aircraf, which has the poten<al to support live feeds from the internet, innova<ve applica<ons for the crew and passengers and offers airlines a future-‐proof op<on with broadband capacity for growth ! 4
Slide 12: Financial Summary
© Financial Summary yy inmarsat
Slide 13: Financial overview
Financial overview Free cash flow expansion follows investment phase ! Highly cash genera<ve core business with growth ! Largely fixed opera<ng costs ! ~70% core EBITDA margin ! Fully-‐funded investment programme ! Modest leverage at peak of investment cycle ! Long-‐term dividend policy in place !
Slide 14: Net debt at December 2013
Net debt at 31 December 2013 Fully funded, low leverage, attractive long-term debt Net debt US$m $1,799 1,800 Convertible ! Fully-‐funded business plan Bond 2017 $329 ! $1.05bn of available liquidity • $750m undrawn bank facility 1,300 Senior Notes • $144m cash on hand Due 2017 $850 • $156m Ex-‐Im
Slide 15: Appendix
© Appendix
Slide 16: Inmarsat Global record of growth
Inmarsat Global record of growth Historical revenue and EBITDA growth Revenue growth by sector ($ in millions) ($ in millions) 1,000 1,000 CAGR 900 900 Sector 2005–2013 Revenue CAGR: 6.2% 776 795 800 747 755 800 695 Maritime 6% 700 635 700 600 557 556 562 600 530 545 491 500 495 Revenues EBITDA 500
Slide 17: Maritime market overview
Maritime market overview ! Commercial mari<me market Commercial Ships by Type* • Represents 75,421 vessels 1,071 5,020 5,064 • Total addressable market today Passenger 20,000 vessels 7,505 Container • Only 5,247 have VSAT installed today 11,749 Miscellaneous ! Other poten<al mari<me markets Bulk/Dry
Slide 18: XpressLink take-up
XpressLink take-up ! Significant fleets commipng to XpressLink ! Mul<-‐year agreements – five years standard ! >800 installa<ons ! Total installed VSAT base 1,478 ships (XL and legacy VSAT) • Revenue > $70m pa, EBITDA margin 15-‐20% • Significant and growing margin expansion opportunity ! Acquisi<on o
Slide 19: IsatPhone Pro
IsatPhone Pro ! IsatPhone Pro >86,000 ac<ve subscribers ! >10% market share by units ! IsatPhone outselling market leader ! Reignited growth in land voice revenue afer years of decline Cumulative net adds since 2011* IsatPhone 2 ISatPhone Pro Taking market share from competitors * Based on change in
Slide 20: 2013 revenue breakdown
2013 revenue breakdown Inmarsat Global FY 2013 MSS revenue breakdown by sector FY 2013 revenue breakdown by type Leasing Voice Aviation 11% Leasing 15% 13% 11% Land 17% Data 76% Maritime 57% Inmarsat Solutions FY 2013 revenue by business line Broadband & Other MSS 50% Inmarsat MSS 50% 20
Slide 21: Staying connected: in-flight Wi-Fi
Staying inmarsay connected vena ot Inmarsat connects European Passengers with Wi-Fi. Meeting the demand Approximately 50% of billion the world’s fleet will have seviesed bea been equipped with Wi-Fi revenue sector by 2020 connectivity by 2020 ‘Source: MS Resparch Onboard advantages ‘i Passenger bene
Slide 22: Q&A
Q&A