SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — Investor Presentation (March 2019)
33 slides from SES SA FDR (Class A)'s investor presentation, March 2019
Slide 1: Investor Presentation March 2019
INVESTOR PRESENTATION MARCH 2019 Investor presentation | March 2019
Slide 2: Contents
Contents 1) Executive Summary and Business Overview Page 3-4 2) FY 2018 Results Highlights Page 5-6 3) Outlook and Strategic Priorities Page 7-9 4) Video Page 10-13 5) Networks Page 14-19 6) U.S. C-band Initiative Page 20 7) Conclusion Page 21 8) FY 2018 Results Page 22-31 9) Disclai
Slide 3: Executive Summary
Executive Summary Strong business execution, delivering on all aspects of the 2018 financial outlook; focus on execution paramount in 2019 Balanced portfolio of high-growing Networks and sustained, highly profitable Video business through 2020 and ahead of the launch of our next generation network -
Slide 4: World's Leading Satellite-enabled Solutions Provider
World’s Leading Satellite-enabled Solutions Provider 99% coverage of the world EUR 2BN annual revenue EUR 7BN contract backlog EUR 7BN market cap. 99.999% service reliability EUR 1.26BN annual EBITDA <3.3x net debt / EBITDA EUR 12BN enterprise value Video Networks EUR 1.3BN revenue EUR 0.7BN revenue
Slide 5: Focus on Execution Delivers Strong Performance
Focus on Execution Delivers Strong Performance Strong Business Performance Delivered in 2018 Revenue of EUR 2,010.3 million. Underlying revenue up 1.9%(1) (YOY) Breakout year for SES Networks (+15.8% YOY); growth in all 3 verticals Strong Focus on Cash, Efficiency and Leverage Free cash flow b
Slide 6: Delivered on 2018 Financial Outlook
Delivered on 2018 Financial Outlook EUR million 2018 Actual 2018 Outlook Group revenue (as reported) 2,010.3 1,958 - 2,002 - At EUR/USD FX rate of EUR 1 = USD 1.15 2,045 1,990 - 2,035 Video (as reported) 1,306.3 1,303 - 1,318 - At EUR/USD FX rate of EUR 1 = USD 1.15 1,324 1,320 - 1,335 Networks
Slide 7: Our Evolving Business - Balanced Portfolio of Stability and Growth
Our Evolving Business - Balanced Portfolio of Stability and Growth Revenue and EBITDA(1) EUR million 2,060 – 2,160 2,045 >40% of 35% of revenue Networks revenue Networks Outlook fully reaffirmed. ▲ Strong growth engine for the SES business Unchanged since outlook in early 2018 ▲ Satellite becoming m
Slide 8: Our Strategic Priorities
Our Strategic Priorities Video Reinforce and drive value through our core video neighbourhoods Develop OTT and orchestration capabilities to support our content provider customers reach new markets and audiences MOVING IMAGES THAT MOVE THE WORLD Take advantage of opportunities to maximise effi
Slide 9: Leading the Transformation in a Rapidly Evolving Market
Leading the Transformation in a Rapidly Evolving Market Video | Industry Trends SES | Video ▲ Strongest DTH neighbourhoods in mature markets ▲ Broadcasters/platform operators facing accelerated disruption ▲ Expanding platforms in Asia, Latin America and Eastern Europe ▲ Number of linear TV channels
Slide 10: Large, Highly Profitable and Resilient Video Business
Large, Highly Profitable and Resilient Video Business 8,020 351 million 40 EUR 5 billion 10 YEARS TV channels TV homes DTH platforms contract backlog typical contract length VIDEO DISTRIBUTION (75% of Video 2018 revenue) VIDEO SERVICES ~15% (25% of Video 2018 revenue) Europe (~50%): leading video ne
Slide 11: Delivering Video Revenue in Line with Expectations
Delivering Video Revenue in Line with Expectations SES Video revenue EUR million 1,356.1 1,306.3 ▲ Delivering value in our core neighbourhoods via higher quality 1,346.3 1,292.1 • +2% (YOY) growth in Europe and North America HD TV channels ▲ Expanding DTH platforms across emerging markets • +13% (YO
Slide 12: Delivered Important Successes for Our Customers in 2018 - Video
Delivered Important Successes for Our Customers in 2018 - Video Investor presentation | March 2019 12
Slide 13: Video Market Dynamics
Video Market Dynamics Number of TV channels(1) Transponder demand(2) Key drivers 9,000 600 ▲ Adding premium/live content in higher quality Europe 6,000 400 (HD/UHD) offsetting SD switch-off ~50% 3,000 200 ▲ Reach in Western Europe expected to remain of total Video 2017 2018 2019 2020 2022 2017 2018
Slide 14: Expanding Networks Business Is The Growth Engine For SES
Expanding Networks Business Is The Growth Engine For SES >10% CAGR Unique GEO-MEO MEF CE 2.0 EUR 2 billion 3-5 YEARS revenue (2017-2020) and terrestrial network telco-grade certification contract backlog typical contract length MOBILITY (~25% of Networks 2018 revenue) ~25% GOVERNMENT Home equivalent
Slide 15: Delivering Double-digit Growth, Well Ahead of Expectations
Delivering Double-digit Growth, Well Ahead of Expectations SES Networks revenue EUR million 695.7 ▲ Growing the role of satellite within existing customer segments 616.1 671.1 • Growing in all 3 verticals (Government, Fixed Data and Mobility) 579.8 ▲ Integrating satellite within the global network e
Slide 16: Delivered Important Successes for Our Customers in 2018 - Networks
Delivered Important Successes for Our Customers in 2018 - Networks Investor presentation | March 2019 16
Slide 17: Networks Market Dynamics
Networks Market Dynamics Vertical Demand drivers Global ComSatCom services spending USD billion(1) ▲ Growing need for Intelligence, Surveillance, Recognition 7.4 and resilience and other data hungry applications Government 8.0 ~40% 6.0 4.0 ▲ Demand for reliable and secure fibre-like connectivity of
Slide 18: Building the Future with O3b mPOWER
Building the Future with Dramatically scales the industry’s only commercially and operationally proven NGSO Unprecedented flexibility to create differentiated user experiences and commercial models Seamless, intelligent integration with existing terrestrial, MEO and GEO satellite networks Reach and
Slide 19: O3b mPOWER
O3b mPOWER Multi-terabit 5,000+ 400M 100% productive beams go only to customers scalable to 10s of Tbps globally beams per satellite square kilometres covered not empty territory CURRENT MEO NEW OPPORTUNITIES FROM 2021 16 satellites in service(1) plus four launching in 2019 serving: Seven super-powe
Slide 20: Significant Progress in C-Band Framework for U.S. 5G
Significant Progress in C-Band Framework for U.S. 5G Clear economic and strategic benefit of extensive and rapid 5G deployment and innovation across U.S. C-Band Alliance formed (SES, Intelsat, Eutelsat, Telesat) to repurpose C-Band while protecting customers Leading proposal in FCC Proceeding. No se
Slide 21: Strong Focus on Execution to Drive Growth and Shareholder Value
Strong Focus on Execution to Drive Growth and Shareholder Value Up to 6% growth(1) ▲ Fuelled by double-digit growth in Networks Growing revenue (2018-2020) ▲ Underpinned by large and resilient Video neighbourhoods Up to 5% growth(1) ▲ Investing in managed service capabilities, supporting networks ex
Slide 22: FY 2018 Results
SES’ FY 2018 RESULTS
Slide 23: FY 2018 Financial Highlights
FY 2018 Financial Highlights Revenue of EUR 2,010.3 million including growth in underlying revenue of 1.9% (YOY) • Group revenue -1.2% as reported including impact of weaker U.S. Dollar; and +1.7% at constant FX including periodic and other revenue EBITDA of EUR 1,255.5 million (-5.2% as reporte
Slide 24: Underlying Business Driving Revenue Growth At Constant FX
Underlying Business Driving Revenue Growth At Constant FX Revenue walk EUR million Underlying revenue up EUR 37.1 million (or 1.9%) at constant FX compared with the prior year Total revenue included EUR 47.1 million of periodic and other revenue (2017: EUR 55.2 million) Investor presentation | M
Slide 25: EBITDA Development Reflects Investment in Fast-growing Networks
EBITDA Development Reflects Investment in Fast-growing Networks EBITDA walk EUR million EBITDA EBITDA EBITDA margin margin margin 65.1% 64.9% 62.5% Change in recurring OpEx (EUR 54.7 million) principally reflects investment in expanding capabilities across the Networks’ business EBITDA margin 63
Slide 26: Net Profit of EUR 292.4 million
Net Profit of EUR 292.4 million EUR million 2018 2017 EBITDA 1,255.5 1,324.2 2018 higher (YOY) reflecting the entry into service of new satellites and Depreciation, impairment and amortisation expense (864.4) (713.6) EUR 156.4 million impairment expenses (1% of total assets) Operating profit 391.1 6
Slide 27: Free Cash Flow Before Financing Activities up 14.4% (YOY)
Free Cash Flow Before Financing Activities up 14.4% (YOY) Free cash flow (FCF) before financing activities EUR million 871 761 655 43% 37% 32% 2016 2017 2018 Free Cash Flow (FCF) before financing activities FCF as a % of group revenue Net cash generated by operating activities of EUR 1,191.3 milli
Slide 28: Reducing CapEx through Innovation and Fleet Optimisation
Reducing CapEx through Innovation and Fleet Optimisation 2018 CapEx was 30% lower than original forecast reflecting strong focus on cash flow and leverage, underpinned by disciplined spending CapEx reduction of ~30% during the period 2010 to projected 2023 (5-year rolling average) CapEx to sal
Slide 29: Leverage Development in Line with Expectations
Leverage Development in Line with Expectations Net debt to EBITDA Times(1) 3.53 3.43 3.41 3.27 3.29 3.09 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net debt reduced by 5.5% (YOY) to EUR 3,475.8 million reflecting 14.4% (YOY) improvement in free cash flow before financing EUR 900 million of succes
Slide 30: Financial Outlook
Financial Outlook FY 2019 FY 2020 Financial outlook assumes EUR/USD FX rate of EUR 1 = USD 1.15, nominal launch schedule and satellite health status Video revenue EUR 1,225 – 1,255 million EUR 1,200 – 1,250 million (was EUR 1,250 -1,300 million) Networks revenue EUR 740 – 775 million EUR 850 – 900 m
Slide 31: Conclusion
Conclusion Strong business execution, delivering on all aspects of the 2018 financial outlook; focus on execution paramount in 2019 Balanced portfolio of high-growing Networks and sustained, highly profitable Video business through 2020 and ahead of the launch of our next generation network - O3b mP
Slide 32: 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 should
Slide 33: Investor Relations
Richard Whiteing Investor Relations richard.whiteing@ses.com T +352 710 725 261 M +352 691 898 956 Connect with us 33