Inmarsat — Investor Presentation (March 2014)
21 slides from Inmarsat's investor presentation, March 2014
Slide 1: Corporate Presentation
Corporate Presentation Inmarsat plc March 2014
Slide 2: Business Overview
Business Overview Market leader in MSS today moving into VSAT markets Mobile Satellite Services (MSS) VSAT ‘Global Xpress’ Services Today: Tomorrow: Market leader Entering established markets Global coverage, L-band Global coverage, Ka-band Mission critical customer needs Future proof existing busin
Slide 3: MSS markets
MSS markets Maritime 57% of MSS revenue (1) 190,000 subscribers Market leader in all sectors Drivers: Ship management Automation cost savings Mission critical remote Crew welfare / access connectivity Smaller vessel adoption Safety services Land Mobile 17% of MSS revenue 172,000 subscribers Global c
Slide 4: High barriers to entry
High barriers to entry Multiple challenges for any new entrant Scale needed to build a global network and fund Capital replacement satellites Uniform global spectrums rights now extremely Spectrum Rights challenging to secure and retain Orbital locations can take years to secure and Orbital Slots ma
Slide 5: Network and route to market
Network and route to market Established model for existing and future services Inmarsat Global Satellite Inmarsat-4 satellites Inmarsat-5 satellites Lifetimes to 2023 Lifetimes to 2028 Network MSS services Services VSAT services Portfolio Inmarsat Solutions Inmarsat Inmarsat Inmarsat Direct and Mari
Slide 6: High-quality end customer base
High-quality end customer base Government / Military Enterprise Maritime International Aid Supplying mission-critical applications to a diverse end user base 6
Slide 7: Global Xpress overview
Global Xpress overview Global coverage complete in 2014 Future proof global MSS franchise Expansion of activities into established, Global 3 satellites coverage growing adjacent VSAT markets Ka-band 2014 $1.9bn established market opportunity Significant capacity pre-commitments $1.9bn $1.6bn market
Slide 8: Our Strategy
Our Strategy Operational progress matched by commercial readiness L-band growth via Inmarsat- Empower a high-value solutions 4, Alphasat & Inmarsat-6 ecosystem centred on Inmarsat Further growth & diversity via Reorganised for proximity, Inmarsat-5 & GX agility & efficiency Solutions Ecosystem - dri
Slide 9: Global Xpress market opportunity
Global Xpress market opportunity Adjacent established markets with growth 2008 - $1.4bn* 2010 - $1.9bn* Maritime Maritime VSAT Space VSAT Space Segment Segment Energy $145m $135m VSAT Space Energy (8%) (10%) Segment VSAT Space $168m Segment US DoD, (9%) US DoD, $152m ROW Gov't ROW Gov't, (11%) comme
Slide 10: Further growth options: M2M Services
Further growth options M2M Services High growth market opportunity >$250m Strategic partnerships with SkyWave and ORBCOMM Suited to L-band network Competitor market share opportunity Significant product development completed 10
Slide 11: Further growth options: In-flight Connectivity
Further growth options In-flight Connectivity GX Aviation will provide speeds of up to 49 Mbps to aircraft, which has the potential to support live feeds from the internet, innovative applications for the crew and passengers and offers airlines a future-proof option with broadband capacity for growt
Slide 12: Financial Summary
© Financial Summary »)) inmarsat
Slide 13: Financial overview
Financial overview Free cash flow expansion follows investment phase Highly cash generative core business with growth Largely fixed operating costs ~70% core EBITDA margin Fully-funded investment programme Modest leverage at peak of investment cycle Long-term dividend policy in place Eight year hist
Slide 14: Net debt at 31 December 2013
Net debt at 31 December 2013 Fully funded, low leverage, attractive long-term debt Net debt US$m $1,799 Convertible Fully-funded business plan 1,800 $329 Bond 2017 $1.05bn of available liquidity • $750m undrawn bank facility 1,300 Senior Notes • $144m cash on hand Due 2017 $850 • $156m Ex-Im Facilit
Slide 15: Appendix
© Appendix
Slide 16: Expected cash capex profile
Expected cash capex profile Nearing end of capex cycle US$m 600 Notes: •Current as of March 2014 •Based on current expectations as to total 500 programme costs and timing •Excludes capitalised interest •Assumes rolling procurement of next 400 generation L-band satellites (Inmarsat-6) with first laun
Slide 17: Revenues
Inmarsat Global record of growth Historical revenue and EBITDA growth Revenue growth by sector ($ in millions) ($ in millions) 1,000 1,000 CAGR 900 900 Sector 2005–2013 Revenue CAGR: 6.2% 776 795 800 747 755 800 695 Maritime 6% 700 635 700 600 557 556 562 600 530 545 491 500 495 Revenues EBITDA 500
Slide 18: Maritime market overview
Maritime market overview Commercial maritime market Commercial Ships by Type* • Represents 75,421 vessels 5,064 1,071 5,020 • Total addressable market today 20,000 Passenger vessels 7,505 Container • Only 5,247 have VSAT installed today 11,749 Miscellaneous Other potential maritime markets Bulk/Dry
Slide 19: XpressLink take-up
XpressLink take-up Significant fleets committing to XpressLink Multi-year agreements – five years standard >800 installations Total installed VSAT base 1,478 ships (XL and legacy VSAT) • Revenue > $70m pa, EBITDA margin 15-20% • Significant and growing margin expansion opportunity Acquisition of Glo
Slide 20: IsatPhone Pro
IsatPhone Pro IsatPhone Pro >86,000 active subscribers >10% market share by units IsatPhone outselling market leader Reignited growth in land voice revenue after years of decline Cumulative net adds since 2011* IsatPhone 2 ISatPhone Pro Taking market share from competitors * Based on change in billa
Slide 21: 2013 revenue breakdown
2013 revenue breakdown Inmarsat Global FY 2013 MSS revenue breakdown by sector FY 2013 revenue breakdown by type Leasing Voice Aviation 11% Leasing 15% 13% 11% Land 17% Data 76% Maritime 57% Inmarsat Solutions FY 2013 revenue by business line Broadband & Other MSS 50% Inmarsat MSS 50% 21