Inmarsat — FY2015 Earnings Presentation
27 slides from Inmarsat's earnings presentation, Mar 3, 2016
Slide 1: Preliminary Results 2015
INMARSAT > Preliminary Results 2015 Preliminary Results 2015 3 March 2016
Slide 2: Forward looking Statements
Preliminary Results 2015 3 March 2016 Forward looking Statements This announcement contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors that may cause our a
Slide 3: Introduction
INMARSAT > Preliminary Results 2015 Introduction Andrew Sukawaty Chairman
Slide 4: The Inmarsat Investor Proposition
The Inmarsat Investor Proposition Global mobile connectivity on land, at sea and in the air > Meeting the remote and mobile connectivity needs of our customers > Serving 4 key markets: Maritime, Aviation, Government and Enterprise > Exploding growth in global mobile data traffic, applications, solut
Slide 5: Value for shareholders
Value for shareholders Share price and total shareholder return from Share price and total shareholder return Inmarsat IPO (June 2005) to 31 December 2015 in 2015 700% 584% 600% 50% 47% 42% 500% 40% 400% 364% 30% 300% 217% 20% 200% 138% 11% 81% 8% 100% 10% 24% 0% 0% FTSE100 FTSE250 Inmarsat -1% -10%
Slide 6: Business Review 2015
INMARSAT > Preliminary Results 2015 Business Review 2015 Rupert Pearce Chief Executive Officer
Slide 7: Building for the long term
Building for the long term Long term Opportunities Immediate Challenges ˃ Participating in the mobile broadband > Macro-economic pressures revolution – devices, apps & data ˃ Global trade slowdown ˃ Maritime: from safety to smart shipping ˃ Government budgets & currency turmoil ˃ Aviation: from safe
Slide 8: 2015 Business highlights
2015 Business highlights Delivering the foundations for long-term growth ˃˃ Launch of I-5 F2 and I-5 F3 and global GX CSI = key inflection point F2 & F3 launched sucessfully ˃˃ Significant Stage set to toprogress on aviation deliver global commercialpassenger connectivity services on the GX with ˃ P
Slide 9: Q4: Maritime
Q4: Maritime Weaker quarter: growth in new broadband services vs ongoing legacy decline & rising headwinds FleetBroadband (FB) ˃ Strong growth for new broadband services Revenue Number of installed vessels ˃ FleetBroadband up 12% ˃ VSAT/XpressLink up 18%, backlog still rising nicely ˃ Continued pred
Slide 10: Q4: Government
Q4: Government Challenging markets, but Inmarsat strategy is working Improving pipeline ˃ Marketplace remains attritional ˃ Historically low optempo levels…but set to increase? ˃ Ongoing budget pressures for legacy government customers $m ˃ Growth strategy focuses on innovation & diversification ˃ G
Slide 11: Q4: Enterprise
Q4: Enterprise Building the foundations for growth acceleration FleetBroadband Number of new ˃ Old & new services offsetting each other Revenue M2M devices in Q4 ˃ M2M business delivering good growth ˃ FleetBroadband continued strong growth ˃ Isatphone 2 well-positioned as market leader +46% +10k ˃
Slide 12: Q4: Aviation
Q4: Aviation Continued strong growth and exciting passenger connectivity opportunity SwiftBroadband ˃ Strong growth in Business & General Aviation and Safety Revenue Active Terminals & Ops services ˃ SwiftBroadband – active base up to around 7,200 ˃ Classic Aero still delivering good growth in SOS +
Slide 13: Q4 Summary
Q4 Summary Continuing to build strong growth foundations through a period of transition ˃ Decent financial performance in relatively challenging market conditions ˃ Global Xpress finally becomes global! ˃ Encouraging progress in Aviation – DT partnership & major GX airline wins ˃ Airbus Inmarsat-6 c
Slide 14: Financial Review 2015
INMARSAT > Preliminary Results 2015 Financial Review 2015 Tony Bates Chief Financial Officer
Slide 15: Group Income statement
Group Income statement $m 2015 2014 Change Q4 2015 Q4 2014 Change Revenue 1,274.1 1,285.9 (0.9%) 334.8 333.0 0.5% Operating costs (548.1) (584.9) 36.8 (131.7) (167.7) 36.0 EBITDA 726.0 701.0 25.0 203.1 165.3 37.8 Depreciation & amortisation etc (311.4) (293.1) (18.3) (85.2) (79.9) (5.3) Other 11.8 1
Slide 16: Revenue & EBITDA
Revenue & EBITDA $m 2015 2014 Change Q4 2015 Q4 2014 Change Wholesale MSS revenue 832.8 791.4 5.2% 215.3 211.8 1.7% Other revenue & terminals 352.7 408.3 (13.6%) 83.8 102.7 (18.4%) LightSquared 88.6 75.4 17.5% 35.7 18.5 93.0% Energy asset disposal - 10.8 (100.0%) - - - Total Revenue 1,274.1 1,285.9
Slide 17: Operating costs
ay Operating costs inmarsat $585m $548m > ® Disposal -$9m M@ Direct -$54m © Indirect $26m _ Total -$37m change 2014 2015 17
Slide 18: Maritime
Maritime $m Business Unit Results 700 595.6 593.2 600 ˃ FleetBroadband +18% 500 450.4 459.4 ˃ VSAT/XpressLink +13% 400 ˃ Fleet -53% 300 ˃ Other -21% 200 ˃ EBITDA margin: 100 ˃2015: 77.4% 0 Revenue EBITDA ˃2014: 75.6% 2014 2015 18
Slide 19: Maritime
Maritime Quarterly Product Revenue (year-on-year change) Proportion of Maritime Revenue FleetBroadband VSAT +18% +8% 2015 +13% +11% +26% +29% +19% +24% +17% +19% +12% +29% +23% +20% +32% +22% 61% 15% 6% 18% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4
Slide 20: Government
Government $m Business Unit Results 350 319.9 ˃ Budget and op tempo pressure 300 286.6 continues 250 216.4 ˃ Slower decline in the US 200 191.0 ˃ Revenue down 13% (32% 2014) 150 ˃ Contract flow ˃ GX uptake 100 50 ˃ Other markets mixed ˃ Major contract renewal 0 Revenue EBITDA ˃ 8 new territories ope
Slide 21: Enterprise
Enterprise $m Business Unit Results 180 160 10.8 ˃ 2014 energy asset disposals 140 ˃ FleetBroadband +49% 120 1.6 ˃ M2M +14% 100 155.9 159.5 80 ˃ GSPS -12% 100.5 113.1 60 ˃Airtime flat 40 ˃Q3 terminal issue 20 ˃ BGAN -6% 0 Revenue EBITDA ˃ EBITDA margin: 2014 ex Disposals 2015 ˃2015: 70.9% 2014 Dispo
Slide 22: Aviation
Aviation $m Business Unit Results 140 126.8 ˃ SwiftBroadband revenue +44% 120 101.1 103.7 100 ˃ Take or Pay 87.2 80 ˃ Investment in capability 60 ˃ EBITDA margin: 40 ˃2015: 81.8% 20 ˃2014: 85.8% 0 Revenue EBITDA 2014 2015 22
Slide 23: Group Cash Flow
Group Cash Flow US$m 2015 2014 Change Q4 2015 Q4 2014 Change EBITDA 726.0 701.0 25.0 203.1 165.3 37.8 Working capital/non-cash items (9.0) (47.6) 38.6 (56.4) (16.1) (40.3) Operating cash flow 717.0 653.4 63.6 146.7 149.2 (2.5) Capital expenditure (493.6) (405.7) (87.9) (177.8) (115.7) (62.1) Interes
Slide 24: Capital Expenditure
Capital Expenditure US$m 2015 2014 Change Q4 2015 Q4 2014 Change Major infrastructure projects 354.1 256.9 97.2 128.9 117.2 11.7 Success-based capex 29.1 25.8 3.3 11.3 10.3 1.0 Other 78.6 100.1 (21.5) 23.5 29.1 (5.6) Cash flow timing 31.8 22.9 8.9 14.1 (40.9) 55.0 Total cash capital expenditure 493.
Slide 25: Net debt
Net debt $m 1,900.7 -44.0 1,985.8 132.2 ˃ Overall profile little changed 2000 176.2 ˃ New revolving credit facility in May 1750 ˃ $500m, five years, lower cost +1.1 1500 993.5 ˃ Stronger bank group 992.4 ˃ Average interest rate now 3.98% 1250 ˃ Maturities run from 2017 to 2022 1000 +25.6 330.0 ˃ Lev
Slide 26: Outlook/Guidance
Outlook/Guidance ˃ Revenues (ex L2) ˃ 2016 - $1,225m-$1,300m ˃ 2018 - $1,450m-$1,600m ˃ LightSquared income ˃ Uncertain ˃ Annual target GX revenues of $500m by the fifth anniversary of Global Commercial Service Introduction remains unchanged ˃ F4 addition to follow ˃ Capex $500m-$600m in 2016, 2017
Slide 27: Results 2015 Q&A
INMARSAT > Preliminary Results 2015 Results 2015 Q&A