SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — Morgan Stanley TMT Conference 2015
38 slides from SES SA FDR (Class A)'s conference presentation, Nov 13, 2015
Slide 1: Morgan Stanley TMT Conference
Morgan Stanley TMT Conference Barcelona 11-13 November 2015 SES Proprietary SES Proprietary
Slide 2: Satellite sector at a glance
Satellite sector at a glance Highly attractive dynamics for a global satellite operator Fixed Satellite Services (FSS) Industry by revenue(1) Key fundamentals of satellites: Other Satellite an efficient, cost effective solution Operators for video and data transmission 22% High margins and incom
Slide 3: Satellite's essential role in communications networks: reach and quality
Satellite’s essential role in communications networks Superior reach and quality to any terrestrial network Reach Terrestrial Satellite broadband Satellite covers virtually 100% of households with broadcast video capability, delivering flawless high quality (UD/UHD) media content 29% Developed (1)
Slide 4: Satellite's essential role in communications networks: cost efficiency and scalability
Satellite’s essential role in communications networks Cost efficient and scalable solution, complemented by OTT Efficiency and scalability Satellite progressively more efficient for media content delivery as USD USD 15 audience grows; terrestrial only cost-efficient at small audience sizes 25,000(
Slide 5: SES at a glance
SES at a glance World leading satellite-enabled solutions provider SES focuses on four key market verticals Video Fixed Data Mobility Government Providing global satellite-enabled solutions GEO GEO HTS Operating 53 GEO satellites using over 20 global teleports, MEO HTS augmented by O3b’s 12 MEO sa
Slide 6: SES at a glance: differentiated global offer, infrastructure
SES at a glance Providing a differentiated global offer: Infrastructure Completing and deploying a multi-layer satellite network to capture global opportunities (1) GEO wide beam + GEO HTS + MEO HTS 53 satellite constellation Adding 36 GHz total Ka- and 12 satellite constellation Ku- capacity
Slide 7: SES at a glance: value-added services
SES at a glance Providing a differentiated global offer: Value-added Services Differentiating SES globally and across market verticals, as well as generating incremental “pull through” Supports broadcasters, Over 3 million households(1) Over 40 years experience Systems and service provider p
Slide 8: SES's vision and strategic focus
SES’s vision and strategic focus Building future-proof differentiation To be the foremost satellite-enabled provider of SES’s vision communications around the world and an indispensable contributor to global digitisation Focus on 1. Globalisation three key 2. Verticalisation horizons 3. Dematuring t
Slide 9: SES's financial track record: profitable growth through globalisation
SES’s financial track record Delivering profitable growth though globalisation Revenue development (at constant FX and same scope) EUR million 2,000 29% +11.1% CAGR 1,500 18% 18% -1.8% CAGR 25% 1,000 +2.3% CAGR 53% 57% (Digital +7.1%) 500 0 2007 2008 2009 2010 2011 2012 2013 2014 Europe North Americ
Slide 10: SES's key market verticals: differentiating capabilities
SES’s key market verticals Differentiating capabilities to optimally serve four attractive market verticals Differentiating solutions: Focusing on four market verticals with strong long-term fundamentals: GEO wide beam Video HD growing in developed markets; Ultra HD now a reality Significant gro
Slide 11: Strong growth foundations across all verticals: Video and Fixed Data
SES’s key market verticals Strong growth foundations developed across all verticals Video Over 30% of SES channels now in HD (rest of world: 19%) +36% 21 million (+7%) additional households served by SES since 2014 Channel growth in last three years 40 Pay TV and free-to-air platforms now supp
Slide 12: Strong growth foundations across all verticals: Mobility and Government
SES’s key market verticals Strong growth foundations developed across all verticals Mobility Serving all three major global inflight connectivity providers (Global Eagle, Gogo and Panasonic) +100% growth in SES capacity contracted by Global Eagle Entertainment in last 12 months Up to 300,000 a
Slide 13: Next Generation Video positioning: technical reach
SES’s Next Generation Video positioning Significantly improving technical reach SES’s significant and growing technical reach 2014 vs. 2013(1) Millions of TV households North America Europe 84m 154m +9m +3m Africa 7m Asia-Pacific +6m 44m Latin America +2m 24m +1m Technical reach of 312 million TV
Slide 14: Next Generation Video positioning: HD TV growth
SES’s Next Generation Video positioning Delivering higher quality via HD TV growth SES’s growing channel count(1) Number of TV channels broadcast over SES’s fleet 8,000 7,115 6,000 6,416 5,237 5,967 4,000 2,178 2,000 1,410 1,836 1,715 0 Q3 2012 Q3 2013 Q3 2014 Q3 2015 Total TV channels HD TV channel
Slide 15: Market outlook: Video
Market outlook: Video Consumers want a higher quality experience with more choice Global TV channels broadcast over satellite(1) UHD and 3D ~750 (+21.8x) HD ~7,800 HD ~22,300 (+2.8x) Total (2014) Total (2024) ~38,700 ~48,500 (+1.3x) SD SD ~30,900 ~25,400 (-1.2x) Higher quality video formats (HD an
Slide 16: Market outlook: Video, linear TV remains principal viewing platform
Market outlook: Video Linear TV remains the principal viewing platform Average daily viewing time per individual(1) Linear vs. non-linear consumption 2014(2) Minutes Minutes 300 300 293 244 232 226 221 250 200 200 100 150 26 19 18 5 7 100 0 2003 2005 2007 2009 2011 2013 U.S.A. U.K. France Germany Sp
Slide 17: Market outlook: Fixed Data
Market outlook: Fixed Data Broadband becoming a universal requirement Projected global IP traffic demand(1) Data traffic by region(1,2) Gigabytes per capita per month worldwide Exabytes per month 25 200 20 150 15 100 10 50 5 Asia-Pacific 0 0 2014 2016 2018 2020 2014 2015 2016 2017 2018 2019 Users
Slide 18: Market outlook: Mobility
Market outlook: Mobility Growing demand for connectivity anytime and anywhere Projected peak throughput per aircraft(1) Aeronautical connectivity(2) Mbits per second FSS in-service units (planes equipped) 100 25,000 80 20,000 60 15,000 40 10,000 20 5,000 0 0 2011 2012 2014 Future 2014 2016 2018 2020
Slide 19: Market outlook: Government
Market outlook: Government Governments expanding their data requirements U.S. DoD spending(1) UAV/ISR platform bandwidth consumption(2) USD billion (at constant FX) Mbits per second 750 Predator 3-5 500 Mbits Reaper 250 5-10 Mbits Global Hawk 0 2006 2008 2010 2012 2014 2016 2018 2020 10-50 Mbits Bas
Slide 20: SES Dematuring the industry: Ultra HD milestones
SES Dematuring the industry Achieving important milestones for Ultra HD’s commercial introduction Five commercial UHD channels and four SES demo channels launched • Europe’s first commercial UHD channel (pearl.tv) • World’s first global commercial UHD channel (Fashion One 4K)(1) Six commercial UHD
Slide 21: SES Dematuring the industry: SAT>IP momentum
SES Dematuring the industry Gaining industry-wide momentum and support for SAT>IP Satellite-enabled solution to complement linear experience, with non-linear capabilities Delivering satellite signal to any connected IP device SAT>IP Alliance established to encourage SAT>IP’s development and ad
Slide 22: SES Dematuring the industry: global GEO HTS platform
SES Dematuring the industry Building a global GEO HTS platform for Next Generation Data and Mobility SES-12, SES-14 and SES-15 HTS spot beam footprints SES-15 (129° West) SES-14 (47.5/48° West) SES-12 (95° East) Up to 10 GHz HTS Up to 12 GHz HTS Up to 14 GHz HTS Launch in H1 2017 Launch in H2 2017 L
Slide 23: SES Dematuring the industry: O3b Networks market traction
SES Dematuring the industry Accelerating O3b Networks’ market traction globally unique coverage from Medium Earth Orbit (MEO)(1) Fastest growing satellite network in terms of capacity contracted ‘Fibre in the sky’ network now serving 40 customers across 31 countries Seven of O3b’s first eight
Slide 24: SES Dematuring the industry: investment in O3b
SES Dematuring the industry Complementing SES’s GEO assets through investment in O3b SES has a 45% interest in O3b 12 Medium Earth Orbit (MEO), super HTS satellites Covering between 45 degrees North and 45 degrees South Target markets include over 3 billion people High throughput of over 1
Slide 25: Next Generation Data positioning: HTS appeals to a range of customers
SES’s Next Generation Data positioning HTS (GEO & MEO) appeals to a range of customers GEO wide beam + GEO HTS + MEO HTS Broadcast Enterprise VSAT Mobile backhaul 2G Mobile backhaul 3G/4G Oil & Gas, Mining Trunking Consumer broadband Aeronautical Maritime U.S. Governm
Slide 26: YTD 2015 Results: financial highlights
YTD 2015 Results Financial highlights (nine months ended 30 September 2015) YTD 2015 YTD 2014 EUR Growth as Growth at EUR million million reported constant FX(1) Revenue 1,492.6 1,406.6 +6.1% -2.9% EBITDA 1,106.5 1,049.7 +5.4% -3.6% Profit after tax(2) 473.5 456.8 +3.7% n/a Diversified, global rev
Slide 27: YTD 2015 Results: regional revenue developments
YTD 2015 Results Regional revenue developments Europe EUR 760.1 million Further growth in Services and Infrastructure revenue +0.3% as reported(1) Final four txps sold to ETL (YTD 2014: eight txps sold) UHD agreements with pearl.tv, TERN and Sky Deutschland +0.4% at constant FX(1) North Americ
Slide 28: YTD 2015 Results: robust financial and operational metrics
YTD 2015 Results Robust financial and operational metrics As reported YTD 2015 YTD 2014 YTD 2013 EBITDA margin 74.1% 74.6% 73.2% - Infrastructure 84.0% 84.2% 83.6% - Services 16.2% 16.2% 15.9% Contract backlog EUR 7.1 billion EUR 7.3 billion EUR 7.4 billion Net debt to EBITDA 2.62 times 2.87 times 3
Slide 29: SES's solid medium-term growth drivers
SES’s solid medium-term growth drivers Global Video, Next Generation Data and ‘fibre in the sky’ 2016 2017 2018 SES-9 (Asia-Pacific) and SES-10 (Latin America) Global Video 80 incremental transponders with anchor customers Next Generation Data SES-12, SES-14 and SES-15 and Mobility Global HTS platfo
Slide 30: SES's next generation satellite fleet
SES’s next generation satellite fleet Increasing total capacity by 12%; and International by 21% Seven satellites scheduled to be launched by end-2017 Incremental capacity (36 MHz equivalent) +8 +180 +8 +16 +68 Plus 36 GHz total HTS capacity (Broadly equivalent to ~250 TPEs, assuming 4 MHz of SES-12
Slide 31: SES's future CapEx profile: lowering replacement CapEx
SES’s future CapEx profile Lowering replacement CapEx; accelerating growth Capital Expenditure profile EUR million At 24 July 2015: 580 650 495 450 450 900 54 Total 2015-2019: EUR 2.6 billion(1) 680 60 80 600 540 60 60 495 70 450 450 781 57 60 300 631 59 540 350 390 480 362 365 288 60 40 60 0 2011 2
Slide 32: SES's future CapEx profile: reducing normalised CapEx requirement
SES’s future CapEx profile Reducing normalised CapEx requirement Current (2015) Change vs. 2014 Primary mission satellites 32 -14% Average cost per satellite EUR 224 million +2% Assumed design life 15 years - “Normalised” satellite CapEx (annual) EUR 475 million -12% Non-satellite CapEx (annual) EUR
Slide 33: Strong financial capabilities: sound financial framework
SES’s strong financial capabilities Sound and consistent financial framework Current/target 1 IRR hurdle rates Over 10% for Infrastructure(1) (organic & inorganic) Over 15% for Services(1) 2 EBITDA margins Over 82% for Infrastructure 14-18% for Services Net Debt/EBITDA ratio below 3.3x 3 D
Slide 34: Strong balance sheet supports future profitable growth
SES’s financial track record Strong balance sheet supports future profitable growth FY 2004 FY 2014 Net income EUR 341 million EUR 601 million +5.8% CAGR Free cash flow before financing EUR 487 million EUR 738 million +6.8% CAGR Total assets EUR 6.9 billion EUR 10.0 billion +3.8% CAGR Net Debt/EBITD
Slide 35: Profitable top-line growth
SES’s financial track record Profitable top-line growth Revenue (at constant FX and same scope) EBITDA (at constant FX and same scope) EUR million EUR million 2,000 1,500 23% 1,500 14% 1,000 1,000 86% 77% 500 500 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014 Inf
Slide 36: Growing cash flows support future profitable growth
SES’s financial track record Growing cash flows support future profitable growth Free Cash Flow (before financing activities) EUR million and % of Group revenue 900 600 39% 39% 31% 29% 300 24% 16% 11% 13% 0 2007 2008 2009 2010 2011 2012 2013 2014 Free Cash Flow % of revenue EBITDA growth (+3.9% CA
Slide 37: Consistent approach to application of cash
SES’s strong financial capabilities Consistent approach to application of cash Current replacement requirements 1 Fund current business plan Existing pipeline of organic growth opportunities Maintaining a progressive dividend 2 Annual dividend Growth rate assumption annually validated IRR
Slide 38: Disclaimer
Disclaimer This presentation does not, in any jurisdiction, including without limitation in the U.S., constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, or any investment advice in connection with, any securities of SES, nor shou