Eutelsat Communications SA · EURONEXT:ETL
Eutelsat Communications SA — Debt Investor Presentation (June 2019)
31 slides from Eutelsat Communications SA's debt investor presentation, June 2019
Slide 1: Credit Investor Update
CREDIT INVESTOR UPDATE June 2019
Slide 2: Disclaimer
Disclaimer NOTE: UNLESS OTHERWISE STATED, FINANCIAL DATA IN THIS PRESENTATION REFERS TO EUTELSAT COMMUNICATIONS S.A. This presentation has been prepared by Eutelsat Communications solely for informational purposes. This presentation does not constitute or form part of and should not be construed as,
Slide 3: Agenda
Agenda 1 Eutelsat in a snapshot 2 Strategy and Outlook 3 Eutelsat Communications Q3 2018-19 performance 4 Conclusion 5 Appendix 3
Slide 4: Organisation chart
Organisation chart ► Simplified organisational chart Eutelsat Communications S.A (listed company) 96.4% Eutelsat S.A. External Bond Issuer shareholders 3.6% ► No guarantee on financial indebtedeness 4
Slide 5: Eutelsat in a snapshot
Eutelsat in a snapshot KEY DATA REVENUE BREAKDOWN BY APPLICATION By geography ► Revenues of €1.41bn 5% Western Europe 6% Central Europe 11% 30% ► Fleet of 37 satellites; global MENA RCA coverage 10% SSA Americas 6% 8% ► Discretionary Free Cash Flow of APAC 24% Unallocated and others €415m By applica
Slide 6: Highly experienced management team
Highly experienced management team ► CEO of Eutelsat Communications since March 2016, implemented new strategic plan ► 20-year experience in the Video industry Rodolphe Belmer ► Former CEO of Canal+ Group, led the Group’s diversification into FTA CEO ► Board member of Netflix ► HEC graduate Michel A
Slide 7: Eutelsat's global network
Eutelsat’s global network eS SAFE THE EUTELSAT FLEET | @ stavicorit FUTURE SATELLITES: EUTELSAT 7C © EUTELSAT 36A currently under redeployment MAY 2019 © inclined orbit EUTELSAT 5 West B + capacity on EUTELSAT QUANTUM third-party satellites KONNECT KONNECTVHTS HOTBIRD 13F HOTBIRD 136 o> eutelsat 7
Slide 8: Sound financial structure
Sound financial structure ONGOING DEBT OPTIMISATION NET DEBT TO EBITDA RATIO ► Net Debt/EBITDA ratio reduced to 3.1x • Versus 3.4x at 30 June 2016 • December is usually the peak in the 3.4x annual net Debt given dividend timing 3.2x 3.0x 3.1x ► Pre-hedge of 2020 bond swap component for €500m ► Stron
Slide 9: Bond and bank debt maturity schedule
Bond and bank debt maturity schedule Pre-hedge: €500m at c. 1.12% ex. spread €930m €800m €200m €500m 2.625% €450m €300m 2.0% €600m 1.125% 3.125% 2020 2021 2022 2024 2025 Undrawn lines of credit Outstanding Bonds (ETL S.A.) (Eutelsat S.A) Term loan / undrawn line of credits of Eutelsat Communications
Slide 10: Commitment to Investment Grade Credit Ratings for Eutelsat S.A
Commitment to Investment Grade Credit Ratings for Eutelsat S.A MOODY’S S&P FITCH RATINGS ► Current ratings ► Current ratings: ► Current ratings • Eutelsat SA1: Baa3 • Eutelsat SA: BBB- • Eutelsat SA: /stable /Stable3 BBB/Stable5 • Eutelsat • Eutelsat • Eutelsat Communications2: Communications: Commu
Slide 11: Video KPIs: resilience in Europe, growth globally
Video KPIs: resilience in Europe, growth globally SATELLITE GAINING SHARE GROWING CHANNEL LINE-UP INCREASING HD PENETRATION GLOBALLY Satellite TV channels (units) HD channels (units) Satellite Subs (millions) 21 463 216 5 077 194 17 023 86 87 2 020 1 989 6 152 6 346 965 2013 2018 2013 2018 2013 2018
Slide 12: Agenda
Agenda 1 Eutelsat in a snapshot 2 Strategy and Outlook 3 Eutelsat Communications Q3 2018-19 performance 4 Conclusion 5 Appendix 12
Slide 13: Reminder: Our strategic roadmap
Reminder: Our strategic roadmap Step 1 Step 2: return to growth GROW TOPLINE MAXIMIZE EXTRACT VALUE CAPTURE THE FREE CASH-FLOW FROM THE CORE CONNECTIVITY GENERATION VIDEO BUSINESS OPPORTUNITY 13
Slide 14: Significant progress on all components of cash generation since FY 16
Significant progress on all components of cash generation since FY 16 Item Achievement Status Guidance reduced from €500m to Cash Capex Delivered €400m LEAP program generating €30m Opex Secured external cost-savings €50m savings through Cash interest Secured bond refinancing Asset >€600m asset sold
Slide 15: Build on our core Video business; capture longer term potential in Connectivity
Build on our core Video business; capture longer term potential in Connectivity to accelerate growth MEDIUM TERM LONG TERM FIXED MOBILE VIDEO BROADBAND CONNECTIVITY Extracting value from the Prepare From niche core business for scalability to mass market ► Growth potential of Video ► Optimize existi
Slide 16: Financial outlook for Eutelsat Communications
Financial outlook for Eutelsat Communications OPERATING VERTICALS ► c. -3% in FY 2018-191 REVENUES (At constant currency, perimeter and ► Returning to slight growth in FY 2019-20 accounting standards) EBITDA MARGIN ► Above 78% from FY 2018-19 (At constant currency) CAPEX ► FY 2017-18 to FY 2019-20:
Slide 17: Agenda
Agenda 1 Eutelsat in a snapshot 2 Strategy and Outlook 3 Eutelsat Communications Q3 2018-19 performance 4 Conclusion 5 Appendix 17
Slide 18: Highlights
Highlights Core Broadcast business showing resilience Current year topline adjustment reflects delays in Fixed Broadband and Video and tougher conditions in Fixed Data and Professional Video All our other objectives are confirmed with next year revenues supported by new capacity and other tailwinds
Slide 19: Q3 Revenues
Q3 Revenues Q3 REVENUE BRIDGE (€M) ► Third Quarter revenues of €337m, up 0.7% ► Negative perimeter effect • Deconsolidation of Eutelsat 25B 12 -4.0% ► Positive currency effect • €/$ rate of 1.14 versus 1.21 last 8 year (4) (13) ► Positive swing of €12m in ‘Other Revenues’ 334 337 • Net of negative h
Slide 20: Q3 2018-19 revenues by application
Q3 2018-19 revenues by application REVENUE REVENUES LIKE-FOR-LIKE2 CHANGE CONTRIBUTION1 (€m) YoY QoQ CORE BUSINESSES Video 67% 215 -2.5% +0.0% Government 12% 10% 40 -1.0% +0.2% Services Fixed Data 9% 30 -17.8% -7.3% CONNECTIVITY Fixed 6% 19 -9.7% -5.3% Broadband Mobile Connectivity 6% 20 +4.7% +1.3%
Slide 21: Agenda
Agenda 1 Eutelsat in a snapshot 2 Strategy and Outlook 3 Eutelsat Communications Q3 2018-19 performance 4 Conclusion 5 Appendix 21
Slide 22: Investment case
Investment case ► Strong market position: Among top 3 in the sector with high barriers to entry ► Backlog representing >3 years of revenues ► High profitability and strong cash generation • EBITDA margin objective >78% • Discretionary-Free-Cash-Flow of €415m1 ► Sound financial structure: • Ongoing r
Slide 23: Agenda
Agenda 1 Eutelsat in a snapshot 2 Strategy and Outlook 3 Eutelsat Communications Q3 2018-19 performance 4 Conclusion 5 Appendix 23
Slide 24: Appendix: Eutelsat Communications H1 2018-19 key financial data
Appendix Eutelsat Communications 5.1 H1 2018-19 key financial data 5 5.2 Eutelsat S.A. financials 24
Slide 25: Eutelsat Communications H1 2018-19 Key Financial Data
Eutelsat Communications H1 2018-19 Key Financial Data First Half Underlying REVENUES 2018-19 performance Operating Verticals €660m -2.4%1 Revenues EBITDA margin At constant currency 79.0% -0.4 pts Cash Capex (€130)m (€77)m Discretionary Free Cash-Flow €235m -30% Mostly reflecting capex phasing At co
Slide 26: Appendix: Eutelsat S.A. financials
Appendix Eutelsat Communications 5.1 H1 2018-19 key financial data 5 5.2 Eutelsat S.A. financials 26
Slide 27: Eutelsat SA main P&L items
Eutelsat SA main P&L items For the year ended For the half-year ended (Audited) (Non-audited) (in € millions) 30 June 30 June 31 Dec. 31 Dec. Change Change 2017 2018 2017 2018 REVENUES 1,481 1,411 -5% 689 659 -4% Operating costs (99) (97) -2% (46) (43) -7% Selling, general and administrative expense
Slide 28: Eutelsat SA main Balance sheet items
Eutelsat SA main Balance sheet items For the year ended For the half-year ended (in € millions) (Audited) (Non-audited) 30 June 30 June 31 Dec. 31 Dec. Change Change 2017 2018 2017 2018 Total of non-current assets 5,579 5,488 (91) 5,383 5,349 (34) Total current assets 835 1,094 +259 761 1,906 +1,145
Slide 29: Eutelsat's SA financial structure
Eutelsat’s SA financial structure NET DEBT AS PER COVENANT DEFINITION (€M) ► Average cost of debt after hedging: 2.5% when restated from the repayment of the Jan. 3,043 3,040 19 maturity 2,671 2,709 ► Strong liquidity • Cash of €672m in addition to the €800m allocated to the Jan 2019 redemption 30 J
Slide 30: Future launches
Future launches EUTELSAT EUTELSAT KONNECT EUTELSAT EUTELSAT Name 7C 5 WEST B KONNECT VHTS HOTBIRD HOTBIRD 13F 13G Orbital 7° East 5° West TBD TBD TBD 13° East 13° East Position Launch date1 June 2019 Q3 2019 H2 2019 Q4 2019 2021 2021 2021 Manufacturer Launcher TBD TBD TBD MENA Europe Flexible SSA Eu
Slide 31: Speaker and IR Contacts
Speaker and IR Contacts Sandrine TÉRAN Joanna DARLINGTON, Chief Financial Officer Financial Communications Director and Chief Transformation Officer T: +33 1 53 98 31 07 E: jdarlington@eutelsat.com Cédric PUGNI Alexandre ENJALBERT Head of Investor Relations Investor Relations T: +33 1 53 98 31 54 T:
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