Eutelsat Communications SA · EURONEXT:ETL

Eutelsat Communications SA — H1 2005-2006 Earnings Presentation

30 slides from Eutelsat Communications SA's earnings presentation, Feb 17, 2006

  1. Slide 1: Eutelsat Communications Interim results: H1 2005-2006

    Eutelsat Communications Interim results: H1 2005-2006 February 17, 2006 Giuliano Berretta, Chairman and Chief Executive Officer Jean-Paul Brillaud, Deputy Chief Executive Officer Claude Ehlinger, Chief Financial Officer

  2. Slide 2: 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

  3. Slide 3: Strong results in the first half: Key business highlights

    f Strong results in the first half Key business highlights Profitability maintained, financial flexibility improved The right satellites for the right markets Giuliano Berretta, Chairman and CEO Page 3 February 17, 2006. H1 2005-2006

  4. Slide 4: Introduction

    Introduction > GROWTH OF 2.6%, EXCLUDING NON-RECURRING REVENUES > Consolidated leading position in Europe, notably in Video > Robust growth of Data & Value-Added Services > Sustained activity in our “Second Continent” (Eastern and Central Europe, Middle East, Africa) > PROFITABILITY MAINTAINED, FLEX

  5. Slide 5: Strong results in the first half

    Strong results in the first half REVENUES in Million € EBITDA in Million € +6.4%(1) 394.9 +4.6% 311.0 371.1 297.2 Dec. 31, 2004 pro forma Dec. 31, 2005 Dec. 31, 2004 pro forma Dec. 31, 2005 (1) incl.17.4M€ of non recurring revenues ORDER BACKLOG in Billion € FILL RATE 474 460 transponders available

  6. Slide 6: Development strategy spanning two continents

    Development strategy spanning two continents > Consolidating Video positions 1 Western Europe > Data & VAS focused on institutional and new services > New TV channels and platforms 2 Emerging Markets > Development of Data & VAS services Examples of new TV channels or platforms Examples of new Data &

  7. Slide 7: Strategy validated by half-year performance

    Strategy validated by half-year performance > Continuous growth in number of 4 channels (+75) 1 Video > Development of Video services in our Emerging Markets Second Continent > Robust growth of Data > Central Europe > Continuous deployment of VAS services > Eastern Europe, Data and focused on key ac

  8. Slide 8: Strong momentum in half-year results

    Strong momentum in half-year results f Key business highlights Profitability maintained, financial flexibility improved The right satellites for the right markets Jean-Paul Brillaud, Deputy CEO Page 8 February 17, 2006. H1 2005-2006

  9. Slide 9: Revenue growth across all applications

    Revenue growth across all applications in Million € H1 2005-2006 H1 2004-2005 Change % Key highlights Video Services 259.0 255.7 +1.3% In line with objectives Data & VAS 83.1 77.0 +7.9% Robust performance of VAS Multi-Usage Leases 33.5 32.1 +4.2% Renewals of contracts Other Revenues 1.9 3.2 Sub-Tota

  10. Slide 10: 75 new TV channels at video positions since June 30, 2005

    75 new TV channels at video positions since June 30, 2005 Confirming leading position over Europe 6 6 Analogue Digital Development of Sky Digital in UK Key position Development in for MultiChoice (Africa), Development Eastern Europe Poverkhnost (Ukraine) of Digiturk and NTV (Russia) 1 1 Focus on Fre

  11. Slide 11: Data & Value-Added Services: robust growth

    Data & Value-Added Services: robust growth D-STAR deployment driven Growth sustained by Data by Africa and Europe +7.9% 83.1M€ 77.0 M€ Europe: Europe: 1948 1948 Russia: Russia: 62 62 +5% Middle Middle && Far Far East: East: 1023 1023 +26% South South America: America: 29 29 Africa: H1 04-05 H1 05-06

  12. Slide 12: Investment to secure first-class fleet and service

    Investment to secure first-class fleet and service TM TM > Upcoming launches of HOT BIRD 7A (Feb. 21, 2006) and HOT BIRD 8 (May 2006) TM to ensure service continuity and achievement of sparing at 13°E (HOT BIRD ) Satellites to launch HB8 Premium satellites HB7A Multipurpose satellites HB6 HB4 HB3 AB

  13. Slide 13: Satellite opportunities in a changing broadcast market

    Satellite opportunities in a changing broadcast market HDTV DTT / IPTV/DVB-H > HDTV is an emerging market today > DTT Development (France, Italy) > Experimentation of DVB-H by satellite (TV on mobile) > Cautious forecasts for 2006 as launch of > Satellites remain the best solution to feed DTT and HD

  14. Slide 14: Strong results in the first half: Claude Ehlinger, CFO

    Strong results in the first half Key business highlights f Profitability maintained, financial flexibility improved The right satellites for the right markets Claude Ehlinger, Chief Financial Officer Page 14 February 17, 2006. H1 2005-2006

  15. Slide 15: Key indicators in line with FY objectives

    Key indicators in line with FY 06 objectives H1 H1 2004-2005 % IFRS in million € Key highlights 2005-20061 Pro forma Change Revenue 394.9 371.1 +6.4% Growth: +2.6% OPEX (83.9) (73.9) EBITDA2 311.0 297.2 +4.6% EBITDA margin 78.7% 80.1% (1.4 pt) In line with FY 2006 guidance Net result (21.2) (42.9) C

  16. Slide 16: Operating expenses variance analysis

    Operating expenses variance analysis – in million € H1 2004-2005 H1 2005-2006 +2.4 +4.8 -1.6 +4.4 73.9 +3.1% 83.9 Reported Reversal of Variance Reported 2001 business In-orbit Non-recurring OPEX insurance ATLANTIC BIRD™ 1 of OPEX OPEX tax accrual insurance reduction Page 16 February 17, 2006. H1 200

  17. Slide 17: Net result, impacted by post-IPO debt restructuring costs and satellite impairment charge

    Net result, impacted by post-IPO debt restructuring costs and satellite impairment charge Condensed income statement H1 2005-2006 H1 2004-2005 Change % Key highlights IFRS - In million € Pro forma Revenue 394.9 371.1 +6.4% OPEX (83.9) (73.9) EBITDA 311.0 297.2 +4.6 % Depreciation and amortisation (1

  18. Slide 18: Financial expenses impacted by 39.2 M€ of post-IPO debt restructuring costs

    Financial expenses impacted by 39.2 M€ of post-IPO debt restructuring costs H1 2005-2006 H1 2004-2005 IFRS In million € Pro forma Interest expenses (84.4) (83.6) Hedging instruments 10.0 (6.7) Foreign exchange gains/ (losses) 0.2 (0.1) Amortisation of loan set-up fees (4.6) (6.2) Sub-Total (78.8) (9

  19. Slide 19: Post-IPO debt restructuring costs and satellite impairment charge of 59.2 M€

    Post-IPO debt restructuring costs and satellite impairment charge of 59.2 M€ IFRS In million € H1 2005-2006 H1 2004-2005 Pro forma Net result as reported (21.2) (42.9) Post-IPO debt restructuring costs +39.2 - W1 related impairment after deferred tax +19.9 - ATLANTIC BIRD™ 1 related impairment after

  20. Slide 20: H1 2005-2006 Income tax analysis

    H1 2005-2006 Income tax analysis H1 05-06 H1 04-05 IFRS in million € Pro forma Income tax of Eutelsat S.A. (statutory) 46.4 37.2 ATLANTIC BIRD™ 1 deferred tax consolidation 3.9 (28.9) impact Deferred tax reversal on “customer contracts and (7.6) (7.6) associated relationships” amortisation Other def

  21. Slide 21: Structurally high operating free cash flow

    Structurally high operating free cash flow Condensed cash flow statement H1 2005-2006 IFRS In million € Net cash flows from operating activities 228 Capital expenditure (73) Operating free cash flow 155 Minority buy-outs (61) Net IPO proceeds 839 Dividend to minority shareholders (8) Financial expen

  22. Slide 22: Improvement of debt profile and leverage ratio

    Improvement of debt profile and leverage ratio 3,157 M€ 2,242 M€ Blended margin: 292 bp (915) Blended margin: 156 bp (32) 825 bp 300 (200) Cash 425 bp 475 PIK loan facility (838) Second Lien facility 255 bp 1,468 1,573 203 bp SatBirds Senior and Revolving facilities Eutelsat SA credit facilities 83*

  23. Slide 23: Strong results in the first half: Giuliano Berretta, Chairman and CEO

    Strong results in the first half Key business highlights Profitability maintained, financial flexibility improved f The right satellites for the right markets Giuliano Berretta, Chairman and CEO Page 23 February 17, 2006. H1 2005-2006

  24. Slide 24: Our strategy

    Our strategy Our strategy is to grow by providing differentiated service offerings to our customers across the most profitable FSS segments Reinforce our leadership in the European satellite video broadcasting 1 market Addressing demand for broadband applications through innovative solutions (Mobile

  25. Slide 25: FY 2006 and mid-term objectives

    FY 2006 and mid-term objectives Current guidance Updated guidance Sales > FY 2006: c. 2% > FY 2006: 2.5% > FY 2007-2009: CAGR c.4% > FY 2007-2009: CAGR above 4.5% Proforma EBITDA French GAAP > FY 2006: stable > FY 2006: EBITDA margin over 76% > FY 07-09: EBITDA margin over 76% > FY 07-09: EBITDA mar

  26. Slide 26: Appendices

    Appendices Page 26 February 17, 2006. H1 2005-2006

  27. Slide 27: Post-IPO Group Structure

    Post-IPO Group Structure Eutelsat Communications In € million As of Dec. 31, 2005 As of June 30, 2005 SatBirds Capital PIK Loan 0 300 Participations Second Lien 0 475 SatBirds Finance Senior Debt 1,513 1,460 Revolver 61 8 Cash (201) (32) Total 1,373 2,211 SatBirds 2 SAS Term Loan 650 650 WhiteBirds

  28. Slide 28: Improvement of credit profile with S&P raising rating to BB+

    Improvement of credit profile with S&P raising rating to BB+ Debt structure post-IPO As of Dec. 31, 2005 As of June 30, 2005 In IFRS, in € million Net Financial Debt 2,242.0 3,157.0 Holdings cash (201) (32) PIK loan 0 300 Senior debt 1,513 1,460 Second Lien 0 475 Revolver 61 8 Eutelsat SA net financ

  29. Slide 29: Settlement of ATLANTIC BIRD 1 dispute

    Settlement of ATLANTIC BIRD™ 1 dispute December 19, 2005 Agreement signed with ALS to acquire ATLANTIC BIRD™ 1 satellite for a total value of 48 M€ Impacts for Eutelsat Operations Unchanged Revenues + 17.4 M€ of non-recurring revenues in Q2 2005-2006 Balance sheet Reduction of the Group’s net financ

  30. Slide 30: Share ownership structure (as of Dec.31, 2005)

    Share ownership structure (as of Dec.31, 2005) Shareholder base of Eutelsat Communications Shareholder base of Eutelsat S.A. RSCC Employees Other minority 3.5% 0.4%% interests Affiliates of Eurazeo 0.9% Free Float 25.5% 33.2% Nebozzo Sarl (1) 15.4% Others 7.2% GSCP Eurovision2000 (2) Cinven Buyout H

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