Inmarsat — H1 2016 Earnings Presentation
20 slides from Inmarsat's earnings presentation, Aug 4, 2016
Slide 1: 2016 First Half Results
Interim Results > August 2016 2016 First Half Results 4th August 2016 © Inmarsat confidential
Slide 2: Disclaimer
Disclaimer Inmarsat 2016 This presentation contains forward-looking statements. The words "believe", "expect", "anticipate", "intend", "plan", "estimate", "expect", "project", "will", "may" and similar expressions as well as statements other than statements of historical facts including, without lim
Slide 3: Business Overview
INMARSAT > Interim Results 2016 Business Overview Rupert Pearce Chief Executive Officer © Inmarsat confidential
Slide 4: Massive transformation underway for telecommunications
Massive transformation underway for telecommunications Inexorable rising demand towards ubiquitous connectivity and global mobility Over The Top Internet of Things Content delivered in and Machine to another way to an Machine (IoT/M2M) increasingly mobile Cloud Services society Explosion of connecte
Slide 5: Capacity rising in response to demand growth
Capacity rising in response to demand growth Significant amounts of capacity being launched…potential oversupply in certain regions and markets ˃ HTS capacity to grow from <700 Gbps in 2015 to ~3,000 Gbps 2020, while ˃ Most satellite operators devote the vast majority of their available HTS demand b
Slide 6: Inmarsat overview
Inmarsat overview Mobility is different…and getting more different ˃ 37 years market leadership, premium brand, strong reputation and proven track record in Mobile Satellite Services ˃ Global, seamless, fully-integrated, mobility-tailored broadband (Ka/S-band) & narrowband (L-band) networks in place
Slide 7: Our growth rocket
Our growth rocket Core L-band services ˃ Connected cars Inmarsat-3, 4 & 6 Wild ˃ Events – Govt. operational tempo Global, highly mobile, agile Cards ˃ China & India and resilient Spectrum ˃ Ligado Networks L-band provides a solid business foundation, steady cash flows ˃ Inmarsat Gateway platform ˃ R
Slide 8: Financial Review
INMARSAT > Interim Results 2016 Financial Review Tony Bates Chief Financial Officer © Inmarsat confidential
Slide 9: Group Income statement
Group Income statement $m H1 2016 H1 2015 Change Q2 2016 Q2 2015 Change Revenue 629.0 616.2 12.8 330.4 311.4 19.0 Operating costs (260.6) (273.5) 12.9 (128.2) (145.5) 17.3 EBITDA 368.4 342.7 25.7 202.2 165.9 36.3 Depreciation & Amortisation (174.6) (150.9) (23.7) (84.1) (75.5) (8.6) Other 0.1 10.4 (
Slide 10: Revenue & EBITDA
Revenue & EBITDA H1 H1 Q2 Q2 $m Change % Change % 2016 2015 2016 2015 Wholesale MSS revenue 430.8 403.8 27.0 6.7% 223.8 205.5 18.3 8.9% Other revenue & 144.8 177.4 (32.6) (18.4%) 71.0 88.4 (17.4) (19.7%) terminals Ligado 53.4 35.0 18.4 52.6% 35.5 17.5 18.0 102.9% Total Revenue 629.0 616.2 12.8 2.1%
Slide 11: Maritime
Maritime Business Unit Results – H1 $m 350 ˃ Better Q2 in ongoing tough markets 297.1 289.7 − Revenue down 0.5% in Q2 (down 4.5% Q1) 300 − Sequential growth (143.1m, 146.6m) 250 230.7 227.1 ˃ Growth in FleetBroadband +4% − Price increase (fleet little changed) 200 − Some migration to VSAT Margin Mar
Slide 12: Maritime
Maritime Quarterly Product Revenue (year-on-year change) Proportion of FleetBroadband Maritime Revenue VSAT 19% 7% Series1 * Series2 24% 17% 12% 2% H1 2016 18% 15% 12% 13% 11% 8% 64% 17% 1 2 3 4 5 6 16% 1 2 3 4 5 6 3% Fleet Other -51% H1 2015 -55% -17% -24% -17% -23% -52% -20% -16% -52% 59% -54% -53
Slide 13: Government
Government Business Unit Results – H1 $m ˃ H1 revenue growth for the first time 160 since the BU was created 3 years ago 137.2 140.7 − Growth in Q1 and Q2 and sequentially 140 120 ˃ US budgetary pressures continue 101.2 − Impact mitigated by initial GX uptake 100 92.2 − Revenue down 7% (down 16% H1
Slide 14: Enterprise
Enterprise Business Unit Results – H1 ˃ Better Q2 in tough ongoing markets $m − Revenue down 4.6% in Q2 (down 12.6% Q1) 79.3 80 72.5 − Sequential growth (38.5m, 34.0m) − Margins improved (revenue mix) 60 54.0 ˃ BGAN -22% 52.6 − Continuing decline, Nepal boost in 2015 40 ˃ M2M +3% − Increasing termin
Slide 15: Aviation
Aviation Business Unit Results – H1 ˃ Continued growth in core business $m − Growth in Q1 and Q2 and sequentially 80 − SwiftBroadband +14% 64.6 − Classic Aero +17% 57.9 60 48.3 ˃ Passenger connectivity coming slowly 45.2 − 2,800 aircraft now at RFI stage or beyond 40 − GX terminal certification prog
Slide 16: Group Cash Flow
Group Cash Flow US$m H1 2016 H1 2015 Change Q2 2016 Q2 2015 Change EBITDA 368.4 342.7 25.7 202.2 165.9 36.3 Working capital/non-cash items 49.0 21.2 28.5 16.3 5.2 (11.1) Operating cash flow 417.4 363.9 54.2 218.5 171.1 47.4 Capital expenditure (139.1) (240.8) 101.7 (100.6) (152.1) 51.5 Interest paid
Slide 17: Capital Expenditure
Capital Expenditure US$m H1 2016 H1 2015 Change Q2 2016 Q2 2015 Change Major infrastructure projects 100.2 188.6 88.4 66.3 115.3 49.0 Success-based capex 23.1 10.8 (12.3) 10.5 5.5 (5.0) Other 34.2 33.0 (1.2) 12.8 5.7 (7.1) Cash flow timing (18.4) 8.4 26.8 11.0 25.6 14.6 Total cash capital expenditur
Slide 18: Net debt
Net debt 1,985.8 1,923.9 ˃ $898m liquidity at 30 June 2016 $m 131.8 -25.5 106.3 − Revolving Credit Facility $500m 2000 − Undrawn Ex-Im Facilities $212m 1750 − Cash $186m +0.6 1500 992.7 993.3 ˃ Leverage well within 3.5x policy level 1250 − 2.1x excl convert (Dec 2015: 2.2x) 1000 − 2.6x inc convert (
Slide 19: Guidance unchanged
Guidance unchanged ˃ Outlook continues to be positive for the long term (GX, Aviation, Demand growth) but very hard to forecast (new products, competition, price, capacity) ˃ Revenues (ex Ligado receipts) − 2016 - $1,175m-$1,250m − 2018 - $1,450m-$1,600m ˃ Ligado receipts − $108m (2016), $111m (2017
Slide 20: Q&A
INMARSAT > Interim Results 2016 Q&A Interim Results 2016 © Inmarsat confidential