Eutelsat Communications SA · EURONEXT:ETL
Eutelsat Communications SA — H1 2017-18 Earnings Presentation
28 slides from Eutelsat Communications SA's earnings presentation, Feb 16, 2018
Slide 1: First Half 2017-18 Results
FIRST HALF 2017-18 RESULTS February 16, 2018
Slide 2: Agenda
Agenda 1 Highlights 2 Operational performance 3 Financial performance 4 Outlook 2
Slide 3: H1 2017-18 Key data
H1 2017-18 Key data Financial First Half Underlying REVENUES outlook 2017-18 performance -2 to -1% Revenues (at constant currency €697m -5.7%1 and perimeter) (vs. H1 16-17) EBITDA margin Above 76% 78.4%2 +0.5 pts2 (at constant currency) (vs. H1 16-17) Discretionary Mid-single digit 3-year CAGR3 €339
Slide 4: H1 revenues analysis
H1 revenues analysis H1 YOY REVENUE BRIDGE (€M) ► H1 revenues of €697m -1.8% • -7.7% reported • -5.7% at constant perimeter and (13) (3) currency (13) (29) ► Underlying businesses down 1.8% excluding ‘Other’ 755 697 revenues Reported Currency 1 Perimeter Change in Operational Reported H1 2016-17 Oth
Slide 5: H1 operating Highlights
H1 operating Highlights Entry into service and ramp-up of EUTELSAT 172B with incremental capacity contracted Solid commercial performance to support revenues in the second half MoU with China Unicom to address satellite communications market in the framework of the “Belt and Road” initiative Acquisi
Slide 6: Solid commercial performance
Solid commercial performance IN VIDEO IN OTHER VERTICALS ► HOTBIRD ► Favourable outcome • Positive outcome of US Government of contract renewal Autumn renewals with Cyfrowy Polsat • New contract with ► Incremental business Mediaset for HD in Government Services at channels 174° East ► Contract ► Mul
Slide 7: Stepping up cooperation with China Unicom
Stepping up cooperation with China Unicom ► Historic and strong partner in the region ► New MoU addressing satellite communications market in the framework of the ‘Belt and Road’ initiative ► Remaining HTS capacity on ETL 172B contracted for in-flight Connectivity ► Considering further joint- develo
Slide 8: Agenda
Agenda 1 Highlights 2 Operational performance 3 Financial performance 4 Outlook 8 8
Slide 9: H1 2017-18 Revenues by application
H1 2017-18 Revenues by application REVENUE REVENUES2 LIKE-FOR-LIKE3 CONTRIBUTION1 (€m) CHANGE CORE BUSINESSES Video 66% 449 -1.2% Fixed Data 11% 73 -10.6% Government 12% 81 -0.1% Services CONNECTIVITY Fixed 6% 44 -8.1% Broadband Mobile 5% 37 +20.6% Connectivity 1 The share of each application as a p
Slide 10: Video
Video 66% REPORTED REVENUES1 (€M) ► H1 revenues of €449m, down 1.2% like-for-like ► Broadcast revenues up 0.3% excluding end of TV d’Orange at 455 452 449 HOTBIRD at end-Dec 2016 ► Mid-single digit decline in Q2 229 Q4 224 Q2 1 226 Professional Video ► 6,810 channels at end-Dec 2017 • +7.4% y-o-y 22
Slide 11: HOTBIRD: HD ramp-up continues to outpace MPEG transition rate
HOTBIRD: HD ramp-up continues to outpace MPEG 4 transition rate 1,012 -1% 1,002 -43 Resilient channel count Dec. 16 Dec. 17 +23% 304 247 Acceleration in HD ramp-up Dec. 16 Dec. 17 +9% 548 502 MPEG-4 still rising but at a lesser pace than HD Dec. 16 Dec. 17 Figures at end Dec. 16 exclude Orange TV 11
Slide 12: Fixed Data
Fixed Data 11% REPORTED REVENUES (€M) ► H1 revenues of €73m, down 85 83 10.6% like-for-like 73 ► Ongoing pricing pressure in all Q2 41 Q4 41 Q2 geographies 36 ► Not offset by additional volumes Q1 43 Q3 42 Q1 37 H1 2016-17 H2 2016-17 H1 2017-18 12
Slide 13: Government Services
Government Services 12% REPORTED REVENUES (€M) ► H1 17 revenues of €81 million, stable like-for-like 90 86 ► Solid levels of renewals with 81 the US DoD in the last 12 months Q2 44 Q4 45 Q2 40 ► Incremental business secured at 174° East covering APAC • Multi-transponder contracts 42 45 41 Q1 Q3 Q1 ►
Slide 14: Fixed Broadband
Fixed Broadband 6% REPORTED REVENUES (€M) ► H1 revenues of €44m, down 8.1% like- for-like ► Down 5% excluding positive one-off in Q1 last year 49 47 ► Underlying decline in Europe 44 ► Revenue trend set to improve in H2 Q2 24 Q4 23 Q2 with Retail JV up and running 22 • Pricing, products and marketin
Slide 15: Mobile Connectivity
Mobile Connectivity 5% REVENUES1 (€M) ► H1 revenues of €37m, up 20.6% like-for-like ► Agreement with Taqnia on the HTS payload of EUTELSAT 3B 37 36 ► Growing wide-beam capacity sales at 33 several orbital positions: Q2 19 • 172° East Q4 19 Q2 18 • 115° West • 117° West 2 Q3 17 Q1 19 ► EUTELSAT 172B
Slide 16: Backlog and Fill Rate
Backlog and Fill Rate BACKLOG (€BN) OPERATIONAL AND LEASED TRANSPONDERS 1,372 1,416 1,326 5.3 5.2 Noorsat 4.7 940 931 949 0.8 0.8 (0.4) 0.7 4.0 4.5 4.3 31 Dec. 30 June 2017 31 Dec. 2017 31 Dec. 16 30 Jun. 2017 31 Dec. 17 2016 Fill 70.9% 67.9% 67.0% Video Others rate Operational transponders ► Backlo
Slide 17: Agenda
Agenda 1 Recent highlights 2 Operational performance 3 2 Financial performance 4 Outlook 17
Slide 18: Profitability
Profitability EBITDA (€M) ► Rise in EBITDA margin to 78.4% 588 545 at constant currency despite lower ‘Other revenues’ • Favourable phasing of certain operating costs Margin at constant 77.9 78.41 ► Positive impact of “LEAP” cost currency (%) 77.4 77.4 77.5 saving plan • Ahead of plan at the Half Ye
Slide 19: Net income
Net income Extracts from the consolidated income H1 H1 Change statement in €m1 2016-17 2017-18 Revenues 755 697 -7.7% EBITDA2 588 545 -7.4% ► Lower D&A reflecting end of life / full depreciation of Operating 337 280 -16.9% several satellites income ► Capital gain on Wins/DHI last year ; negative acc
Slide 20: Discretionary Free Cash-Flow up 8%
Discretionary Free Cash-Flow up 8% At constant currency In €m +8% at constant currency (13) Currency (53) impact (21) 412 1 (1) 339 (1) Net cash Flow from Cash Capex Interest and Other Discretionary Free operations fees paid net of Cash-flow interests received Change -70 +77 +6 +14 H1 2016-17 482 (1
Slide 21: Net debt stable after dividend payment and Noorsat acquisition
Net debt stable after dividend payment and Noorsat acquisition In €m -€10m (32) (24) 89 (339) 295 3,641 3,630 Net Debt at Discretionary Dividends Equity FX portion of Change in Net Debt at end- June 17 Free Cash-Flow paid investments CC Swap fin. leases / end-Dec. 17 ECA and Others 21
Slide 22: Financial structure
Financial structure NET DEBT / EBITDA RATIO1 ► Net Debt/EBITDA ratio reduced to 3.3x 3.4x 3.3x • versus 3.4x at 31 Dec. 2016 ► Average cost of debt after hedging reduced to 2.9% • versus 3.1% in H1 2016-17 ► Average weighted maturity of 2.5 years • versus 2.9 years at 31 Dec. 2016 31 Dec. 2016 31 De
Slide 23: Agenda
Agenda 1 Recent highlights 2 Operational performance 3 Financial performance 4 3 2 Outlook 23 23
Slide 24: Y-o-Y revenue trend to improve in the Second Half
Y-o-Y revenue trend to improve in the Second Half HALF YEAR PROFORMA REVENUES IN FY 2016-17 AT H1 2017-18 EUR/USD RATE (1.17) ► 2017-18 revenue path back-end loaded ► Comparison base to ease in H2 734 • Lower ‘Other’ revenues 41 699 13 • End of TV d’Orange on 31 Dec. • Easier comps for Fixed Data ►
Slide 25: Financial outlook
Financial outlook REVENUES ► -1% to -2% in FY 2017-181 (At constant currency, and perimeter) ► Return to slight growth from FY 2018-19 EBITDA MARGIN ► Above 76% in FY 2017-18 (At constant currency) ► Above 77% from FY 2018-19 CAPEX ► FY 2017-18 to FY 2019-20: average of €420m2 per year FY 2017-18 ex
Slide 26: Appendix
APPENDIX a eutelsat
Slide 27: Future launches
Future launches EUTELSAT EUTELSAT AFRICAN Name BROADBAND 7C 5 WEST B SATELLITE Orbital 7° East 5° West TBD TBD Position Launch date1 H2 2018 H2 2018 2019 2019 Manufacturer Launcher MENA Europe Flexible SSA Coverage SSA MENA Applications Video Video Government Services Broadband Total Capacity 49 Ku
Slide 28: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as any offer for sale of or solicitation of any offer to buy any securities of Eutelsat Communications, nor should it, or any part of it, form the basis of or be relied on in connection with any contract or
Eutelsat Communications — H1 2017-18 Earnings Presentation on 6ix