SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — FY2018 Earnings Presentation
34 slides from SES SA FDR (Class A)'s earnings presentation, Feb 27, 2019
Slide 1: Full Year 2018 Results
FULL YEAR 2018 RESULTS YEAR ENDED 31 DECEMBER 2018 27 FEBRUARY 2019 (BETZDORF, LUXEMBOURG) FY 2018 Results |
Slide 2: Agenda
Agenda Steve Collar Business Highlights and Outlook President & CEO Ferdinand Kayser Video CEO of SES Video John-Paul Hemingway Networks CEO of SES Networks Andrew Browne Financial Review CFO FY 2018 Results | 2
Slide 3: Business Highlights
BUSINESS HIGHLIGHTS Steve Collar, President & CEO
Slide 4: Focus on Execution Delivers Strong Performance
Focus on Execution Delivers Strong Performance Strong Business Performance Delivered in 2018 Revenue of EUR 2,010.3 million. Underlying revenue up 1.9%(1) (YOY) Breakout year for SES Networks (+15.8% YOY); growth in all 3 verticals Strong Focus on Cash, Efficiency and Leverage Free cash flow b
Slide 5: Delivered on 2018 Financial Outlook
Delivered on 2018 Financial Outlook EUR million 2018 Actual 2018 Outlook Group revenue (as reported) 2,010.3 1,958 - 2,002 - At EUR/USD FX rate of EUR 1 = USD 1.15 2,045 1,990 - 2,035 Video (as reported) 1,306.3 1,303 - 1,318 - At EUR/USD FX rate of EUR 1 = USD 1.15 1,324 1,320 - 1,335 Network
Slide 6: Leading the Transformation in a Rapidly Evolving Market
Leading the Transformation in a Rapidly Evolving Market Video | Industry Trends SES | Video ▲ Strongest DTH neighbourhoods in mature markets ▲ Broadcasters/platform operators facing accelerated disruption ▲ Expanding platforms in Asia, Latin America and Eastern Europe ▲ Number of linear TV channels
Slide 7: Our Evolving Business - Balanced Portfolio of Stability and Growth
Our Evolving Business - Balanced Portfolio of Stability and Growth Revenue and EBITDA(1) EUR million 2,060 – 2,160 2,045 >40% of 35% of revenue Networks revenue Networks Outlook fully reaffirmed. ▲ Strong growth engine for the SES business Unchanged since outlook in early 2018 ▲ Satellite becoming m
Slide 8: Building the Future with O3b mPOWER
Building the Future with Dramatically scales the industry’s only commercially and operationally proven NGSO Unprecedented flexibility to create differentiated user experiences and commercial models Seamless, intelligent integration with existing terrestrial, MEO and GEO satellite networks Reach and
Slide 9: Significant Progress in C-Band Framework for U.S. 5G
Significant Progress in C-Band Framework for U.S. 5G Clear economic and strategic benefit of extensive and rapid 5G deployment and innovation across U.S. C-Band Alliance formed (SES, Intelsat, Eutelsat, Telesat) to repurpose C-Band while protecting customers Leading proposal in FCC Proceeding. No se
Slide 10: SES Video
SES VIDEO Ferdinand Kayser, CEO of SES Video
Slide 11: Delivering in Line with Expectations
Delivering in Line with Expectations SES Video revenue EUR million 1,356.1 ▲ Delivering value in our core neighbourhoods via higher quality 1,306.3 1,346.3 1,292.1 • +2% (YOY) growth in Europe and North America HD TV channels ▲ Expanding DTH platforms across emerging markets • +13% (YOY) growth in T
Slide 12: Delivered Important Successes for Our Customers in 2018
Delivered Important Successes for Our Customers in 2018 FY 2018 Results | 12
Slide 13: Markets are Challenging but Core Neighbourhoods Supported by Long-term Commitments
Markets are Challenging but Our Core Neighbourhoods are Supported by Long-term Commitments Video Distribution revenue walk EUR million (52.7) ▲ Underlying revenue -5.2% (YOY) +4.4 1,031.4 • Knock-on impact of the expiration of certain 983.1 short-term capacity contracts in Q3 2018, led Underlying -5
Slide 14: Video Services Allowing Us to Deliver a Broader Range of Services
Video Services Allowing Us to Deliver a Broader Range of Services to Our Customers Video Services revenue walk EUR million (1.5) ▲ Underlying revenue -0.5% (YOY) 324.7 n/a 323.2 • HD+ growth supported by Q2 2017 price increase Underlying -0.5% • Non-renewal of certain low margin, legacy services in
Slide 15: SES Networks
SES NETWORKS John-Paul Hemingway, CEO of SES Networks
Slide 16: Delivering Double-digit Growth, Well Ahead of Expectations
Delivering Double-digit Growth, Well Ahead of Expectations SES Networks revenue EUR million 695.7 ▲ Growing the role of satellite within existing customer segments 616.1 671.1 • Growing in all 3 verticals (Government, Fixed Data and Mobility) 579.8 ▲ Integrating satellite within the global network e
Slide 17: Delivered Important Successes for Our Customers in 2018
Delivered Important Successes for Our Customers in 2018 FY 2018 Results | 17
Slide 18: Driving Momentum in U.S. and Global Government
Driving Momentum in U.S. and Global Government Government revenue walk EUR million +43.4 ▲ Underlying revenue +19.4% (YOY) (5.0) 275.4 • Significant incremental adoption of MEO driving growth in U.S. government, 237.0 complemented by strong execution in GEO renewals and new business wins Underlying
Slide 19: Delivering Growth in Fixed Data Against Industry Trend
Delivering Growth in Fixed Data Against Industry Trend Fixed Data revenue walk EUR million +8.5 ▲ Underlying revenue +2.1% (YOY) +4.9 255.8 • Deployment of new managed connectivity 242.4 services in Asia and Americas driving growth (YOY) Underlying +2.1% Underlying revenue of EUR 72.5 million (+17
Slide 20: Significant Expansion in Aero and Maritime
Significant Expansion in Aero and Maritime Mobility revenue walk EUR million +43.0 ▲ Underlying revenue +35.4% (YOY) (15.2) 164.5 • Significant aeronautical growth, notably in North America (SES-15) and now also in Latin America (SES-14) 136.7 Underlying +35.4% • Growing in Maritime driven by import
Slide 21: Financial Review
FINANCIAL REVIEW Andrew Browne, CFO
Slide 22: Financial Highlights (1/2)
Financial Highlights (1/2) Revenue of EUR 2,010.3 million including growth in underlying revenue of 1.9% (YOY) • Group revenue -1.2% as reported including impact of weaker U.S. Dollar; and +1.7% at constant FX including periodic and other revenue EBITDA of EUR 1,255.5 million (-5.2% as reported
Slide 23: Financial Highlights (2/2)
Financial Highlights (2/2) Net debt to EBITDA ratio 3.29x, compared with 3.27x at 31 December 2017, including 5.5% net debt reduction • EUR 900 million of financing completed in 2018 with no further senior debt maturities to be refinanced until early 2020 • Investment grade status recently re-affi
Slide 24: Underlying Business Driving Revenue Growth At Constant FX
Underlying Business Driving Revenue Growth At Constant FX Revenue walk EUR million Underlying revenue up EUR 37.1 million (or 1.9%) at constant FX compared with the prior year Total revenue included EUR 47.1 million of periodic and other revenue (2017: EUR 55.2 million) FY 2018 Results | 24
Slide 25: EBITDA Development Reflects Investment in Fast-growing Networks
EBITDA Development Reflects Investment in Fast-growing Networks EBITDA walk EUR million EBITDA EBITDA EBITDA margin margin margin 65.1% 64.9% 62.5% Change in recurring OpEx (EUR 54.7 million) principally reflects investment in expanding capabilities across the Networks’ business EBITDA margin 63
Slide 26: Net Profit of EUR 292.4 million
Net Profit of EUR 292.4 million EUR million 2018 2017 EBITDA 1,255.5 1,324.2 2018 higher (YOY) reflecting the entry into service of new satellites and Depreciation, impairment and amortisation expense (864.4) (713.6) EUR 156.4 million impairment expenses (1% of total assets) Operating profit 391.1 6
Slide 27: Free Cash Flow Before Financing Activities up 14.4% (YOY)
Free Cash Flow Before Financing Activities up 14.4% (YOY) Free cash flow (FCF) before financing activities EUR million 871 761 655 43% 37% 32% 2016 2017 2018 Free Cash Flow (FCF) before financing activities FCF as a % of group revenue Net cash generated by operating activities of EUR 1,191.3 milli
Slide 28: Reducing CapEx while also Investing in Growth
Reducing CapEx while also Investing in Growth GEO-MEO Capital Expenditure (growth and replacement)(1) EUR million Change vs. February 2018 outlook: -139 +20 +10 +70 -100 New 1,200 50 100 1050 450 450 450 390 30 30 140 210 120 350 321 100 280 240 140 100 2018 2019 2020 2021 2022 2023 Actual CapEx Com
Slide 29: Leverage Development in Line with Expectations
Leverage Development in Line with Expectations Net debt to EBITDA Times(1) 3.53 3.43 3.41 3.27 3.29 3.09 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net debt reduced by 5.5% (YOY) to EUR 3,475.8 million reflecting 14.4% (YOY) improvement in free cash flow before financing EUR 900 million of succes
Slide 30: Financial Outlook
Financial Outlook FY 2019 FY 2020 Financial outlook assumes EUR/USD FX rate of EUR 1 = USD 1.15, nominal launch schedule and satellite health status Video revenue EUR 1,225 – 1,255 million EUR 1,200 – 1,250 million (was EUR 1,250 -1,300 million) Networks revenue EUR 740 – 775 million EUR 850 – 900 m
Slide 31: Conclusion
CONCLUSION Steve Collar, President & CEO
Slide 32: Conclusion
Conclusion Strong business execution, delivering on all aspects of the 2018 financial outlook; focus on execution paramount in 2019 Balanced portfolio of high-growing Networks and sustained, highly profitable Video business through 2020 and ahead of the launch of our next generation network - O3b mP
Slide 33: Disclaimer
Disclaimer This presentation does not, in any jurisdiction, including without limitation in the U.S., constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, or any investment advice in connection with, any securities of SES, nor should
Slide 34: Richard Whiteing, Investor Relations
Richard Whiteing Investor Relations richard.whiteing@ses.com T +352 710 725 261 M +352 691 898 956 Connect with us 34