Inmarsat — Investor Presentation (April 2012)
25 slides from Inmarsat's investor presentation, April 2012
Slide 1: Corporate Presentation
Corporate Presentation Inmarsat plc April 2012
Slide 2: Our business
Our business The leading Mobile Satellite Core wholesale business generates >70% EBITDA margin excluding LightSquared and Services (MSS) provider 75.4% including LightSquared(1) Mobile communications infrastructure Wholly-owned distribution channel, Inmarsat Solutions Global coverage Stratos, Segovi
Slide 3: Leading competitive position globally
Leading competitive position globally Mobile Inmarsat Inmarsat Leadership position across MSS sectors, sole global Satellite Position (1) Share(1) GEO operator Services Two competitors, both operating in lower-earth orbits (LEO) Maritime No.1 ~ 75% overall Iridium (global) Globalstar (multi-regional
Slide 4: High barriers to entry
High barriers to entry Capital 31 years of technical Global excellence and spectrum rights reliability Distribution Orbital slots network Licensing 34
Slide 5: Our global satellite network
Our global satellite network 10 L-band satellites in geostationary orbit 3 generations and global coverage in L-band Global L-band commercial life to beyond 2023 Alphasat L-band satellite to be launched 2013 3 Ka-band satellites under construction by Boeing, launch in 2013/14 Global Ka-band commerci
Slide 6: Established distribution network
Established distribution network Evergreen distribution agreements with all partners More than 30 distribution partners and over 100% 61%(1) 39%(1) ownership 600 service providers worldwide Distribution partners Stratos (acquired April 2009) Responsible for distribution of ~40% of Inmarsat’s MSS rev
Slide 7: High-quality end-user base
High-quality end-user base Government / Military Enterprise International Aid Supplying mission-critical applications to a diverse end-user base 7
Slide 8: Core strategy roadmap – Multiple paths to Growth
Core strategy roadmap – Multiple paths to Growth Go beyond ATC satellite capacity & S-band Air Passenger Successfully Connectivity launch Government / Military Global Xpress UAVs Re-position Managed Services I-4 based Rapid response franchise VSAT Services portability Maritime and Capacity Leasing E
Slide 9: Core business markets
Core business markets Maritime Land Mobile Aviation 50% of 2011 21% of 2011 14% of 2011 Inmarsat Global MSS revenue Inmarsat Global MSS revenue Inmarsat Global MSS revenue 186,900 terminals 118,300 terminals 13,500 terminals Over 9,800 FleetBroadband 60-65% government business 65-70% government busi
Slide 10: Significant momentum for IsatPhone Pro
Significant momentum for IsatPhone Pro IsatPhone Pro subscribers 50,000 active subscribers reached in Q1 2012 60,000 50,000 40,000 High share of new terminal 30,000 20,000 activations 10,000 0 (1) Q3 Q4 Q1 Q2 Q3 Q4 TD On target to achieve market share 2010 2010 2011 2011 2011 2011 2012 objectives in
Slide 11: Additional growth options
Additional growth options Low data rate services In-flight mobile service Market opportunity >$250m Market opportunity >$200m 19% stake in SkyWave acquired in 2009 No incremental investment 50,000 new terminals migrated to Inmarsat 20+ airlines committed capacity Drives network traffic Emirates, Sin
Slide 12: Inmarsat Global Xpress
Inmarsat Global Xpress Incremental broadband opportunities in the maritime, energy and government sectors $1.4bn market opportunity with established growth 3 satellites Global Ka-band coverage $1.2bn investment programme Significant capacity pre-commitment from Boeing Operational $700m of financing
Slide 13: Financial Summary
Financial Summary »y inmarsat
Slide 14: Financial model
Financial model Largely fixed, highly leverageable cost structure High Core EBITDA margins, (70%) in 2011 Very strong cash flow generation Attractive dividend payment with commitment to grow at 10% in 2012 On-going share repurchasing programme Conservative debt leverage relative to industry Currentl
Slide 15: 2011 revenue breakdown
2011 revenue breakdown Inmarsat Global FY 2011 revenue breakdown by sector FY 2011 revenue breakdown by type Aviation Leasing Voice Leasing 14% 15% 14% 15% Data Land 71% Maritime 21% 50% Inmarsat Solutions FY 2011 revenue by business line Broad- band & Other MSS 44% Inmarsat MSS 56% 15
Slide 16: Revenues
Inmarsat Global track record of consistent revenue and EBITDA growth Historical revenue and EBITDA growth Revenue growth by sector ($ in millions) ($ in millions) 1,200 1,200 CAGR 958 Sector 2005–2011 1,000 1,000 Revenue CAGR: 12% 764 Maritime 5% 800 723 800 695 635 Revenues (75%) EBITDA 557 572 600
Slide 17: Inmarsat plc – net debt 31-12-11
Inmarsat plc – net debt 31-12-11 Net debt $1,361 1,600 Convertible Fully- funded business plan 1,400 Bond 2017 $310 $1.5bn of available liquidity 1,200 $750m undrawn bank facility 1,000 Senior Notes $650 Due 2017 $200m Senior Notes added 800 April 12 US$m 600 $310m cash (pro-forma) Ex-Im Bank $277 4
Slide 18: Appendix
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Slide 19: VSAT market analysis
VSAT market analysis Maritime, energy and government segments are substantial and have Maritime VSAT space Energy VSAT space segment, established growth segment, $135m, 10% $152m, 11% Segment Annual Growth US DoD, ROW Gov’t commercial FSS, Maritime ~22% $502m, 37% Energy ~9% Government ~7% These seg
Slide 20: Opening the wider maritime market
Opening the wider maritime market Inmarsat is the maritime market leader, but not currently in fast growing VSAT segment $1,800 Maritime VSAT Annual Revenues (USD$ millions, retail) $1,600 The broader maritime segment… Iridium Maritime $1,400 Inmarsat Maritime O&G rigs & exploration vessels $1,200 C
Slide 21: Maritime and energy VSAT market
Maritime and energy VSAT market Inmarsat is the maritime market Others inc. Stratos MTN leader, but not currently in fast 23% 14% growing VSAT segment The broader maritime segment… Vizada 14% O&G rigs & exploration vessels Cruise ships Dedicated Schlumberger 15% 10% Commercial maritime VSAT Nessco/I
Slide 22: Government / military market
Government / military market Bandwidth needs for US DoD expanding US DoD already the largest user of Recent US Navy contract required 4 commercial satellite capacity commercial partners for single solution Insufficient proprietary capacity Next generation system cancelled, TSAT Existing and planned
Slide 23: US government capacity requirements
US government capacity requirements US DoD projects ramping demand for commercial satellite capacity Source: National Security Space Office 2007 24 23
Slide 24: Financial considerations
Financial considerations $1.2bn new capital expenditure over 4 years: 3 satellites under fixed price US$ contract with Boeing 3 Proton launch vehicles under fixed price US$ with ILS Includes: launch vehicles, launch insurance, ground infrastructure, terminal development, capitalised development cost
Slide 25: Expected capex profile
Expected capex profile Notes: US$m • Current as of March 2012 700 • Based on current expectations as to total programme costs and timing 600 • Excludes capitalised interest 500 • Assumes rolling procurement of next generation L-band satellites (Inmarsat-6) with first launch in 2019/20 400 300 200 10