Eutelsat Communications Sa · EURONEXT:ETL

Eutelsat Communications Sa — H1 2022-23 Earnings Presentation

32 slides from Eutelsat Communications Sa's earnings presentation, Feb 17, 2023

  1. Slide 1: First Half 2022-23 Results

    FIRST HALF 2022-23 RESULTS 17 February 2023

  2. Slide 2: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 5. Appendix 2

  3. Slide 3: Highlights

    HIGHLIGHTS • H1 Operating verticals down -4.1%, within the range of our Full Year objectives • Maintained industry-leading profitability with an EBITDA margin of 73.0% in H1, despite decline in revenue • Operational success with the launch of four satellites in H1 2022-23 • Rapid ramp-up of EUTELSAT

  4. Slide 4: Key Financial Data

    KEY FINANCIAL DATA YoY Change First Half 2022-23 Reported Like-for-like Total Revenues €574m +0.3% -6.1%1 Operating Verticals Revenues €582m +2.3% -4.1%1 EBITDA margin at constant currency2 72.9% -3.2 pts Cash Capex2 -€194m -€98m Reported Discretionary Free Cash-Flow2 €82m -€125m Adjusted Discretion

  5. Slide 5: Successful Satellite Launches: Operational Excellence & Secured Return to Growth

    SUCCESSFUL SATELLITE LAUNCHES: OPERATIONAL EXCELLENCE & SECURED RETURN TO GROWTH From September to November 2022, successful launch of four new satellites, illustrating operational excellence and efficient supply chain management  KONNECT VHTS, state-of-the-art satellite built by Thales Alenia Spac

  6. Slide 6: Successful Satellite Launches: Incremental Capacity to Support Return to Growth

    SUCCESSFUL SATELLITE LAUNCHES: OPERATIONAL EXCELLENCE & SECURED RETURN TO GROWTH Incremental capacity to support Connectivity-driven return to growth & seamless service continuity for existing customers  KONNECT VHTS  500 Gbps of capacity dedicated to Fixed Broadband and Mobile Connectivity across

  7. Slide 7: Dynamic Commercial Performance of EUTELSAT QUANTUM

    DYNAMIC COMMERCIAL PERFORMANCE OF EUTELSAT QUANTUM Rapid ramp-up of EUTELSAT QUANTUM, with seven out of eight beams commercialized in its first year of service  Active discussions for the commercialization of the final beam  Five of the seven beams are incremental capacity  Four beams selected fo

  8. Slide 8: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 8

  9. Slide 9: H1 2022-23 Revenues

    H1 2022-23 REVENUES H1 YoY revenue bridge (€m)  Total revenues of €574m, down 6.1% like-for-like  Positive currency effect • €/$ rate of 1.01 vs 1.17 last year -4.1% +37  Negative swing of €12m in ‘Other Revenues’ 0 (12) (23) • Of which -€10m related to hedging  Revenues of the Operating Vertica

  10. Slide 10: H1 FY 2022-23 Revenues by Application

    H1 FY 2022-23 REVENUES BY APPLICATION REVENUE REVENUES LIKE-FOR-LIKE2 CONTRIBUTION1 (€m) YOY CHANGE BROADCAST 58% 339 -6.7% Video DATA & 14% PROFESSIONAL 83 -2.5% VIDEO GOVERNMENT 12% SERVICES 67 -20.3% Connectivity FIXED BROADBAND 6% 37 +17.0% MOBILE CONNECTIVITY 10% 56 +32.7% TOTAL OPERATING VERTI

  11. Slide 11: Broadcast

    BROADCAST 58%  H1 revenues of €339m, down 6.7% YoY like-for-like1 351 785 339 • Temporary headwind of the partial renewal of capacity with Nilesat at 7/8°West • Negative impact of the anticipated non-renewal of a capacity contract with Digitürk from mid-November • Lower revenues in Europe related t

  12. Slide 12: Data & Professional Video

    DATA & PROFESSIONAL VIDEO 14%  H1 revenues of €83m, down 2.5% YoY like-for-like1 • Q2 revenues down -2.6% YoY but up +1.3% QoQ 78 83  Improved volume trend in Fixed Data: • Offsetting most of the negative impact of competitive pressure on 42 pricing Q2 39 Q2  Mid-single digit decline in Professio

  13. Slide 13: Government Services

    GOVERNMENT SERVICES 12% 74 67  H1 revenues of €67m, down 20.3% YoY like-for- 161 like1 • Negative carry-forward effect of US Department of Defense renewals in particular Fall 2022 campaign (65% renewal rate) Q2 37 following a 75% renewal rate in Spring 2022 32 Q2 • Reflecting specific US geopolitic

  14. Slide 14: Fixed Broadband

    FIXED BROADBAND 6%  H1 revenues of €37m, up 17.0% like-for-like1 79 • Wholesale agreements with Orange, TIM, Hispasat and Swisscom 30 37 • Ramp-up of the African operations  Q2 revenues up 13.2% YoY; down 1.2% QoQ1 19 Q2 Q2 16  Revenues will be broadly stable over Full Year • Growth to re-acceler

  15. Slide 15: Mobile Connectivity

    MOBILE CONNECTIVITY 10%  H1 revenues of €56m, up 32.7% YoY like-for-like1 • Commercial success of EUTELSAT QUANTUM 56 • Two additional beams commercialized for incremental capacity in maritime Mobility during H1, bringing the total number of beams commercialized for Mobile Connectivity to three 37

  16. Slide 16: Backlog & Fill Rate

    BACKLOG & FILL RATE BACKLOG (€BN) OPERATIONAL & UTILIZED TRANSPONDERS Fill rate 70.6% 73.2% 70.2% 4.2 4.0 3.7 1,380 1,361 1,359 974 996 955 Operational Transponders Of which Utilized Broadcast 64% 62% 59% Transponders 31 Dec. 2021 30 June 2022 31 Dec. 2022 31 Dec. 2021 30 June 2022 31 Dec. 2022 • Na

  17. Slide 17: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 5. Appendix 17

  18. Slide 18: Profitability

    PROFITABILITY EBITDA (€m)  H1 EBITDA margin of 72.9% at constant currency1 down 3.2 points YoY • Lower revenues, especially in the Broadcast vertical 436 419  Higher operating costs Margin at • Higher Bad Debt constant 76.1% 72.9% currency • Increased staff costs due changing revenue mix and, to a

  19. Slide 19: Net Income

    NET INCOME Extracts from the H1 H1 consolidated income CHANGE statement in €m 2021-22 2022-23 Revenues 572 574 +0.3% EBITDA1 436 419 -3.8% ► Lower D&A due to lower in-orbit and on-ground Operating depreciation income 276 151 -45.3% ► Other operating expenses vs. operating income last year, with the

  20. Slide 20: Adjusted Discretionary Free Cash-Flow

    ADJUSTED DISCRETIONARY FREE CASH-FLOW In €m One-off costs related to specific projects, notably 121 COMETE and Eutelsat-OneWeb 353 combination 1 (194) (1) 39 (77) 82 Net Cash-Flow from Cash Capex (1) Interest and Other fees paid Discretionary Free Cash-Flow operations net of interests received Chang

  21. Slide 21: Net Debt Evolution

    NET DEBT EVOLUTION In €m (109) 149 34 (82) 81 2,996 2,814 Net Debt as of Reported Dividend OneWeb equity Other Net Debt as of 30/06/22 DFCF investment 31/12/22 21

  22. Slide 22: Financial Structure

    FINANCIAL STRUCTURE  Net Debt/EBITDA ratio of 3.55x NET DEBT / EBITDA RATIO • Versus 3.53x as of 31 December 2021 and 3.27x at end June 2022 3.53x 3.55x  Average cost of debt after hedging of 2.67% • Versus 2.5% in H1 FY 22  Average weighted maturity of 4.1 years • Versus 4.5 y at 31 Dec 2021 77.

  23. Slide 23: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 5. Appendix 23

  24. Slide 24: Strong Progress on the Telecom Pivot

    STRONG PROGRESS ON THE TELECOM PIVOT Rebalancing of our business towards Connectivity, • where demand is booming Reorganization along two business units to enhance • customer-centricity completed (project COMETE) Successful ramp-up of Eutelsat Advance managed • services solutions Substantial growth

  25. Slide 25: Substantial Growth Capacity to Progressively Support Topline

    SUBSTANTIAL GROWTH CAPACITY TO PROGRESSIVELY SUPPORT TOPLINE INCREMENTAL KEY ENTRY INTO FIRM CAPACITY MARKETS SERVICE* COMMITMENTS HOTBIRD 13G EGNOS Payload Government Q2/Q3 2023 Mobility ~100 Ku spots EUTELSAT 10B c. 35 Gbps EMEA/Atlantic & Indian Q3 2023 Ocean ~230 Ka spots Connectivity KONNECT VH

  26. Slide 26: Financial Outlook Confirmed

    FINANCIAL OUTLOOK CONFIRMED OPERATING VERTICALS ► Between €1,135 to €1,165m in FY 2022-231 REVENUES1 ► Growth from FY 2023-24 ► Not exceeding €400m2 per annum for each CASH CAPEX of the next two fiscal years (FY 2022-23 / FY 2023-24) ► Average of €420m per year over the next ADJUSTED DISCRETIONARY t

  27. Slide 27: Progress at OneWeb Since October Strategic Update

    PROGRESS AT ONEWEB SINCE OCTOBER STRATEGIC UPDATE On track for >35° N coverage in Commercial ramp-up in line, Milestone contracts & partnerships May 23, >25°N-S by Q3 2023 and generating revenues signed in key verticals where full coverage by Jan-24 . demand is well-oriented  36 satellites launched

  28. Slide 28: Update on the Combination with OneWeb

    UPDATE ON THE COMBINATION WITH ONEWEB 14 November 2022 → Signing of the final combination agreement Q4 2022 / mid-2023 → Regulatory approvals By Q2-Q3 2023 → Extraordinary General Meeting of Eutelsat to approve the transaction → Closing  Regulatory approval workstream progressing according to plan

  29. Slide 29: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 5. Appendix 29

  30. Slide 30: Impact of Broadcasting Measures in Russia and Iran

    IMPACT OF BROADCASTING MEASURES IN RUSSIA AND IRAN IMPLEMENTED MEASURES (22 December 2022)  With respect to Russia • Pursuant to the decision of the French Regulatory Authority for Audiovisual, Digital Communication (ARCOM) and Council of the European Union (Regulation 2022/2474), all involvement i

  31. Slide 31: Future Launches

    FUTURE LAUNCHES NAME EUTELSAT 36D FLEXSAT AMERICAS Orbital 36° East Position Approx . Entry into H2 2024 2026 (delivery) service date1 Manufacturer Coverage Africa, Russia, Europe, Americas Middle East Applications Video Connectivity Government 70 transponders in Ku- Total Capacity band More than 10

  32. Slide 32: 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

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