Eutelsat Communications Sa · EURONEXT:ETL
Eutelsat Communications Sa — Investor Presentation (January 2015)
60 slides from Eutelsat Communications Sa's investor presentation, January 2015
Slide 1: Eutelsat Communications Investor presentation January 2015
EUTELSAT COMMUNICATIONS Investor presentation January 2015
Slide 2: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 2
Slide 3: Satellite value chain
Satellite value chain END USERS Satellite Satellite Satellite TV platforms Consumers Businesses manufacturers launchers Operators (pay and free) Telecoms 3
Slide 4: A robust business model with high barriers to entry
A robust business model with high barriers to entry, High barriers to entry Finite resource of orbital positions and frequencies, heavily regulated at international level with key commercial orbital positions have already been developed High upfront capex before operations High technology & technica
Slide 5: Solid industry growth prospects
Solid industry growth prospects Transponder demand by region1 Transponder demand by application in Eutelsat footprint2 Regular capacity HTS capacity 6.8% 72% 5.1% 4.0% 4.2% 7.4% 3.5% 2.8% 1.7% 3.5% 2.1% -1.7% -0.8% -4.2% Other North South LATAM SSA MENA Russia Central Western Asia America East &Cent
Slide 6: Video growth drivers
Video growth drivers Channel growth CAGR of 3.3% in EMEA and LATAM between 2013 and 2023 Image quality HD penetration to rise from 14% to > 35% by 2023 Followed by take-up of UHD 25 000 Number of channels: 20 000 Ultra High Definition High Definition 14% 25% 15 000 38% Standard Definition Source: Eu
Slide 7: HD to ramp-up in all regions
HD to ramp-up in all regions Estimated HD penetration rate by major region by 2023 63% 65% 40% 37% 28% 29% 29% 25% 18% 12% 13% 11% 5% 6% North Western Central LATAM MENA SSA Russia and America Europe Europe Central Asia 2013 2023 Current HD penetration on Eutelsat fleet is 11% Source: Euroconsult 20
Slide 8: Higher capacity requirements more than offset improved compression techniques
Higher capacity requirements more than offset improved compression techniques Number of channels per 36 Mhz transponder Diffusion Ramp-up Format MPEG-2 MPEG-4 HEVC mode DVB-S 12 20 - Standard 1990s-2000s Definition DVB-S2 - 26 - DVB-S 2 to 3 5 - High 2000s-2010s Definition DVB-S2 3 to 4 6 to 8 12 to
Slide 9: Data: strong demand for interconnection
Data: strong demand for interconnection Internet trafic growth (in Exabytes/month) Transponder demand for Corporate Networks Fast Growing Markets 20% 11% 10% 8% 6% Russia and MENA SSA LATAM Asia-Pacific Central Asia Source: Cisco VNI Source: Euroconsult 2014 ~10% demand CAGR in Eutelsat’s fastest gr
Slide 10: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 10
Slide 11: Eutelsat key data
Eutelsat key data Revenues of €1.35bn Fleet of 35 satellites offering global coverage Operating >1,000 transponders Broadcasting >5,700 TV channels Backlog of €6.3bn, representing 4.5 years of revenues As at September 30, 2014 excluding total revenues which are at June 30, 2014 11
Slide 12: Breakdown of FY 2013-2014 revenues
Breakdown of FY 2013-2014 revenues At constant currency Revenues Reported and excl. Satmex (year-on-year) (year-on-year) VIDEO 67% €877 M +1.3% = DATA 14% €190 M +1.2% -11.5% VALUE-ADDED SERVICES 7% €89 M +36.0% +36.3% GOVERNMENT SERVICES 12% €158 M +8.5% +6.7% Expressed as percentage of turnover as
Slide 13: Eutelsat's global network
Eutelsat’s global network 13
Slide 14: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex Acquisition Industry information Other 14
Slide 15: FY 2013-2014: key figures
FY 2013-2014: key figures Revenue Revenues of €1,348 M, up 5.0% + 2.6% at constant currency, excluding non-recurring revenues and Satmex – in line with objectives Strong profitability: EBITDA at €1,033 M EBITDA 76.7% margin including Satmex, in line with objectives Group share of net income at €303
Slide 16: FY 2013-2014: operational highlights
FY 2013-2014: operational highlights Significant contract wins, record backlog: €6.4 Bn, up 14% and 20% including Satmex Acquisition and successful integration of Satmex Successful launches of EUTELSAT 25B, Express-AT1, Express-AT2 and EUTELSAT 3B Procurement of EUTELSAT 172B to support growth in As
Slide 17: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 17
Slide 18: Record order backlog lends strong visibility
Record order backlog lends strong visibility Backlog up 20% from June 2013 BACKLOG (€bn) Integration of Satmex EUTELSAT 9A for Video in Europe +20% EUTELSAT 36C for Video in Africa 6,4 HTS payloads of EUTELSAT 3B and EUTELSAT 65 West A for Latam HTS payload of EUTELSAT 172B for 5,4 Asia-Pacific 5,2
Slide 19: Video: capacity constraints for most of the year
Video: capacity constraints for most of the year Lack of available capacity at several key video neighbourhoods during REVENUES FROM VIDEO most of the year (€M) Specific dynamic in several regions Higher revenue at key Video 877 neighbourhoods serving fast-growing 866 15 Satmex markets (36° East and
Slide 20: Data Services: continuing competitive environment, positive momentum for Satmex
Data Services: continuing competitive environment, Positive momentum for Satmex Continuing competitive environment REVENUES FROM DATA for point-to-point services (€M) Reclassification of certain contracts to other applications to reflect the 190 final usage of the capacity 185 188 28 Satmex Terminat
Slide 21: Value-Added Services: +36% driven by broadband & mobility
Value-Added Services: +36% driven by broadband & mobility REVENUES FOR 154,000 KA-SAT terminals activated VALUE-ADDED SERVICES (€M) at end-June 2014 (91,000 at end-June 2013) 89 Both consumer and professional services performing well 65 50 Mobile connectivity services for maritime markets contribute
Slide 22: Government services
Government services: reflecting outcome of contract renewals, perimeter impacts, new contracts and reclassifications REVENUES FROM Positive effects of …. GOVERNMENT SERVICES New contracts (€M) Reclassification from Data Services revenues in Government services line 158 9 Integration of EUTELSAT 172A
Slide 23: Fill rate
Fill rate OPERATIONAL TRANSPONDERS1 Improvement of fill-rate reflecting (M€) mainly the integration of Satmex satellites and of Express-AT1 in the 996 fleet 858 Fill rate above 80% excluding 801 KA-SAT High fill rate at key video Fill rate2 neighbourhoods 75.6% 74.0% 78.7% 30 June 30 June 30 June 20
Slide 24: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 24
Slide 25: EBITDA margin in line with objective
EBITDA margin in line with objective EBITDA (€bn) Increase in operating expenses • Continued tight cost management +3.8% +4.0% • Increased resources allocated to the development of commercial activity 995 1,033 • Perimeter effect 957 High level of operating profitability with a 76.7% EBITDA margin E
Slide 26: Net income of €303 Million, net margin at 23%
Net income of €303 Million, net margin at 23% Extracts from the consolidated income statement in €M1 FY 2012-13 FY 2013-14 Change Revenues 1,284 1,348 +5.0% FY13-14 includes Satmex from 1st January 2014 EBITDA2 995 1,033 +3.8% Increase in D&A reflecting fleet rejuvenation Operating income 682 623 -8
Slide 27: Cash flow from operations
Cash flow from operations €M 697 816 6501 778 488 4242 % of revenues 57% 40% 64% 51% 58% 31% FY 2011-12 FY 2012-13 FY 2013-14 Cash flow from operations Investments 1 Including acquisition of EUTELSAT 172A for US$228 M (€177 M) and 6% share in Hispasat for €56 M 2 Including €16 M of disposals in equi
Slide 28: Diversified debt structure and strong liquidity
Diversified debt structure and strong liquidity NET DEBT1 Issuance of a 6-year €930 M bond in (€M) December 2013, with a 2.625% coupon 3,779 Early repayment of Satmex bonds 2,647 ($360M) in May 2014 800 Term Loan 800 Term Loan Average weighted maturity of 4.4 years Bonds Improved average cost of deb
Slide 29: Well-spread maturity profile
Well-spread maturity profile DEBT MATURITY PROFILE (as of end-June 2014) €930M €200M €800M €850M €450M €800M €300M €132M €43M 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Bank debt Bonds Others Undrawn lines of credit Note: maturities are provided on a calendar year basis 29
Slide 30: Net debt / EBITDA ratio
Net debt / EBITDA ratio As of 30 June 2014 Reminder: reported Proforma including as of 30 June 2013 (€M) Reported Satmex Acquisition1 Net Debt 3,779 3,779 2,647 12-month rolling 1,033 1,071 995 EBITDA Net Debt / 12-m rolling 3.7 3.5 2.7 EBITDA 1 Calculation based on Proforma EBITDA including Satmex
Slide 31: Dividend payout at the high end of the range
Dividend payout at the high end of the range NET INCOME, GROUP SHARE DIVIDEND PER SHARE (€M) (€) 355 1.08 326 1.03 303 1.00 Payout Ratio 67% 67% 75% 67% 67% 75% FY 2011-12 FY 2012-13 FY 2013-14 FY 2011-12 FY 2012-13 FY 2013-14 31
Slide 32: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 32
Slide 33: Our framework for profitable growth
Our framework for profitable growth Three priority growth opportunities Video: our core activity Data and mobility Geographic expansion Expansion driven by fast- Selected investments in Investments geared growing markets High Throughput towards highest growth Satellites and Payloads markets Higher d
Slide 34: A key player in the Video distribution chain
A key player in the Video distribution chain VIDEO: 67% of revenues and 84% of backlog Strong long-term market trends Geographic: gearing investments towards high growth markets E115WB E8WB E36C E65W Latam MENA Russia Latam Africa Applications: innovation to secure satellites in future broadcast env
Slide 35: Data and mobility: first mover advantage with HTS
Data and mobility: first mover advantage with HTS High Throughput Satellites and Payloads unlocking data and mobility markets by driving down cost per bit KA-SAT: a landmark broadband programme > 150k In-flight Technology & subscribers connectivity Service partner HTS payloads attracting anchor clie
Slide 36: Latin America, Asia-Pacific: strong potential across all Applications
Latin America, Asia-Pacific: strong potential across all Applications LATIN AMERICA ASIA-PACIFIC 3 future satellites to increase EUTELSAT 172B: unmatched and diversify resources Asia-Pacific footprint 5 satellites with Latin America Anchor tenant for in-flight footprint in 2016 broadband and live TV
Slide 37: Driving value creation through specific initiatives
Driving value creation through specific initiatives Opex Containment Initiative Capex Optimisation Purchase performance plan Increased project selectivity Strong focus on technical, G&A Electric propulsion and IT New launchers Savings to reinforce commercial effort Hosted payloads Profitability main
Slide 38: Expansion capacity to support our growth drivers
Expansion capacity to support our growth drivers Seven launches between now and June 2017 EXPANSION CAPACITY BY REGION (For the 7 satellites to be launched by June 2017) Expansion capacity of >30%1 focused 3% 3% 5% On high growth markets, especially Latin America 9% On Video and HTS payloads 11% You
Slide 39: Three year deployment plan
Three year deployment plan EUTELSAT EUTELSAT EUTELSAT EUTELSAT EUTELSAT EUTELSAT EUTELSAT 115 117 65 9B 8 WEST B 36 C 172 B WEST B WEST B WEST A Position 114.9° 9° 7/8° 36° 116.8° 65° 172° West East West East West West East Launch Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q4 2015 Q2 2016 H1 2017 Manufacturer
Slide 40: Outlook: revenue growth acceleration
Outlook: revenue growth acceleration Revenues Around 4.0% growth for 2014-2015, on a proforma basis1 (At constant Currency, Excl. non recurring revenues) Above 5% average growth in 2015-2016 and 2016-2017 EBITDA EBITDA margin above 76.5% to June 2017 €500 M per annum to June 2017 Capex Note: this in
Slide 41: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 41
Slide 42: First quarter revenues: €358m, +4.2%
First quarter revenues: €358m, +4.2%1 REVENUE REVENUES Y-O-Y CHANGE (%) CONTRIBUTION2 (€M) LIKE-FOR-LIKE1 REPORTED 65% Video 228 +3.2 +4.8 15% Data 51 -5.0 +18.4 7% VAS 26 +14.2 +14.1 13% Government Services 44 +2.8 +20.8 1 Change at constant currency and excluding non-recurring revenues, based on r
Slide 43: Video: benefiting from new capacity
Video: benefiting from new capacity Revenues up 3.2%1 reflecting REVENUES Additional resources added at 7°/8° West (€M) in September 2013 228 Entry into service of Express-AT1 2222 2212 Growth at Satmex 5,788 channels broadcast at end- September 2014 +16% y-o-y excluding Satmex Improved HD penetrati
Slide 44: Data: mixed regional trends
Data: mixed regional trends REVENUES (€M) Revenues of €51 M, down 5.0%1 542 532 51 Ongoing tough conditions in EMEA Good momentum in LATAM and Asia-Pacific Improved geographic mix post Satmex acquisition Q1 Q4 Q1 2013-14 2013-14 2014-15 1 On the basis of restated revenues at constant currency 2 Rest
Slide 45: VAS: continued uptake on KA-SAT
VAS: continued uptake on KA-SAT REVENUES (€M) Revenues to €26 M up 14%1 26 25 166,000 terminals activated on KA-SAT at 30 September 2014 23 (108,000 a year earlier) Good uptake in France, Germany, Turkey and Italy Q1 Q4 Q1 2013-14 2013-14 2014-15 1At constant currency 45
Slide 46: Government services: new contracts and good performance of Satmex
Government services: new contracts and good performance of Satmex REVENUES (€M) Revenues to €44 M up 2.8%1 442 44 New contracts, notably on EUTELSAT 48D 432 and EUTELSAT 33B Good performance of Satmex Ongoing impact of the lower level of contract renewals in FY 2013-2014 September/October 2014 renew
Slide 47: Backlog providing strong visibility
Backlog providing strong visibility Backlog up 16 %, 10% excl. Satmex BACKLOG (€Bn) Like-for-like increase reflecting EUTELSAT 9A for Video in Europe 6.4 6.3 EUTELSAT 36C for Video in Africa HTS payloads of EUTELSAT 3B and 5.4 EUTELSAT 65 West A for Latam HTS payload of EUTELSAT 172B for Asia-Pacifi
Slide 48: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 48
Slide 49: Latin America: A highly attractive growth market
Latin America: A highly attractive growth market HIGH GROWTH FORECAST IN LATIN AMERICA AMONG THE FASTEST GROWING MARKETS (Leased capacity CAGR 2011-2016) (# of transponders leased) 1,127 +7.1% +7.1% CAGR +6.5% 798 585 +5.8% 408 +3.6% Video +2.8% 542 390 Data LATAM Russia Sub-Saharan Africa Asia-Paci
Slide 50: Satmex: a major FSS operator in Latin America
Satmex: a major FSS operator in Latin America FSS OPERATIONS: 90% of revenues FSS revenue by application (2013A)1 3 established orbital positions 7% $120 M FSS Revenue 23% C, Ku and Ka-band frequency rights 70% 3 satellites in orbit, 2 satellites being procured Network Services Video Government Tota
Slide 51: Satmex transaction terms
Satmex transaction terms Acquisition of 100% of Satmex capital for $831 M Implied Enterprise Value of $1,142 M including net debt of $311 M1 Tax losses carried forward of over $450 M, valued at c.$100 M 9.7x2 EV/EBITDA based on LTM PF EBITDA3 2-year forward multiple in line with global FSS operators
Slide 52: Satmex and EUTELSAT 65 West A: complementary coverage in Latin America
Satmex and EUTELSAT 65 West A: complementary coverage in Latin America Satmex EUTELSAT 65 West A leading markets MEXICO key target market Eutelsat 115 West A & Eutelsat 115 West B 114.9° W Eutelsat 65 West A 65° W COLOMBIA ECUADOR BRAZIL PERU Eutelsat 117 West A Eutelsat 113 West & Eutelsat 117 West
Slide 53: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 53
Slide 54: Industry average revenue per transponder
Industry average revenue per transponder 2012-2014 AVERAGE REVENUE ESTIMATES PER TRANSPONDER (M$) IN 2011, 2012 & 2013 Eutelsat coverage 3.1 3.0 3.1 2012 2.8 2.6 2.6 2013 2014 2.0 2.0 1.9 1.5 1.5 1.4 1.4 1.5 1.4 1.5 1.5 1.5 1.4 1.4 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.2 1.3 1.2 1.2 1.1 1.2 1.1 1.1 1.1 West
Slide 55: Typical capex for a satellite program
Typical capex for a satellite program 50% Satellite 28% Launcher 14% Insurance 8% Capitalized costs 55
Slide 56: Agenda
Agenda FSS Industry: growth opportunities Eutelsat in a snapshot FY 2013-2014 Highlights Operational Performance Financial Performance Outlook Appendices Q1 2014-2015 performance Satmex acquisition Industry information Other 56
Slide 57: Revenues by Application
Revenues by Application Change (%) 12 months closed 30 june 2013 2014 reported excluding Satmex and at constant currency Video Applications 865.6 877.2 +1.3% = Data & Value-Added Services 252.8 278.5 +10.2% +0.8% Data Services 187.5 189.8 +1.2% - 11.5% Value-Added Services 65.3 88.7 +36.0% +36.3% Go
Slide 58: Capex as defined in the outlook
Capex as defined in the outlook Extracts from the consolidated statement of cash-flows in €M1 FY 2013-2014 Acquisitions of satellites, other property and equipment and 440 intangible assets Repayments of ECA loans and payments under long-term capital 11 leases Capex as defined in the Outlook 451 Not
Slide 59: Free float of 67%
Free float of 67% Eutelsat shareholding structure as of 30 September 2014 Others and public 62.31% 5.01% Bpifrance* China Investment Corporation (CIC) * Formerly Fonds Stratégique d’Investissement 59
Slide 60: 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 or
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