Inmarsat — FY2018 Earnings Presentation
26 slides from Inmarsat's earnings presentation, Mar 7, 2019
Slide 1: Full Year Results 2018
INMARSAT > FY 2018 Results Full Year Results 2018 7 March 2019
Slide 2: Strategic overview and 2018 performance review
INMARSAT > FY 2018 Results Strategic overview and 2018 performance review Rupert Pearce Chief Executive Officer
Slide 3: Inmarsat remains well positioned for future growth
Inmarsat remains well positioned for future growth Compelling market opportunity Inmarsat is well positioned Significant future growth in demand for data “on the move” - satellite connectivity is the only solution Highly differentiated proposition Long-standing Mobility Markets market presence
Slide 4: Diversified portfolio to drive Revenue, EBITDA and FCF growth
Diversified portfolio to drive Revenue, EBITDA and FCF growth Multiple paths to additional Ligado Double digit growth growth & value creation Spectrum China & India – off a solid base Digital services Govt Internet Strategic deals of Things & Op tempo In-Flight Connectivity Base Case GX & EAN Solid
Slide 5: 2018 Operational Review
2018 Operational Review Consistent revenue and EBITDA growth, in line with guidance Strong results, building on return to growth established in 2017 Continued delivery of compelling strategy − Progress right across our diversified growth portfolio − Increasing customer demand for broadband in mo
Slide 6: Maritime 2018 performance
Maritime 2018 performance Robust results amid transition to broadband 2018 progress Future roadmap Fleet Xpress 2,750+ vessels installed in 2018 Install 5,000+ FX vessel commitments 19% of FX installations were new customers Drive into new non-merchant VSAT segments Aiming to capture Consi
Slide 7: Government 2018 performance
Government 2018 performance US Government business continues to outperform 2018 progress Future roadmap Significant contractual wins in the US Expand footprint in new markets, sectors and niches Material increase in underlying revenues from Boeing ToP Major long term contracts fully embedded Solid p
Slide 8: Aviation IFC 2018 performance
Aviation IFC 2018 performance Material strategic, operational and financial progress 2018 progress Future roadmap Aircraft under contract Additional contract wins from new business pipeline 2000 Additional Further increase in aircraft in service, from 100+ in 2018, commitments to generate high margi
Slide 9: Aviation Core 2018 performance
Aviation Core 2018 performance Another year of double digit revenue growth 2018 progress Future roadmap Business and Higher usage in SwiftBroadband Further roll-out of JetConneX, including General aviation incremental customer migration from 260+ new aircraft installed with SwiftBroadband JetC
Slide 10: Enterprise 2018 performance
Enterprise 2018 performance Foundations being built for future IIoT opportunities 2018 progress Future roadmap Stabilisation in certain legacy products, Continue to protect revenues of legacy product lines supported by terminal and handset sales Further develop major IIoT partnerships to help
Slide 11: 2019 Priorities
2019 Priorities Delivering further revenue and EBITDA growth Organisational Maritime Government Aviation Enterprise Infrastructure Objectives Grow share in VSAT Continue to strengthen Further commercial Progress in building market Further strengthen our global segments, protect & diversify
Slide 12: Financial Review
INMARSAT > FY 2018 Results Financial Review Tony Bates Chief Financial Officer
Slide 13: Five Year track record
Five Year track record Revenue and EBITDA (both ex Ligado) and cash capex Revenue EBITDA Cash Capex 1,350 $m 700 $m 750 $m 1,300 600 650 1,250 450 1,200 300 600 1,150 150 1,100 550 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 New GX revenues: especially Maritime R
Slide 14: Group Income statement
Group Income statement $m 2018 2017 Change Q4 2018 Q4 2017 Change Revenue 1,465.2 1,391.7 73.5 378.7 351.8 26.9 Direct costs (255.0) (190.7) (64.3) (75.4) (57.1) (18.3) Gross margin 1,210.2 1,201.0 9.2 303.3 294.7 8.6 Indirect costs* (440.1) (441.8) 1.7 (112.7) (108.5) (4.2) EBITDA 770.1 759.2 10.9
Slide 15: Business Unit Summary ($m)
Business Unit Summary ($m) Maritime 2018 2017 Government 2018 2017 Aviation - IFC 2018 2017 Revenue 552.8 567.3 Revenue 381.0 366.7 Revenue 101.3 49.3 Direct Costs (85.2) (84.0) Direct Costs (66.9) (54.4) Direct Costs (55.1) (11.3) Gross Margin 467.6 84.6% 483.3 85.2% Gross Margin 314.1 82.4% 312.3
Slide 16: Maritime 2018 results
Maritime 2018 results VSAT revenue up $27m, 21.7%, to $151.4m Full Year Revenue ($m) − Market share gains ˃ c. 50% of industry VSAT installations in 2018 93.7 89.8 ˃ c. 20% of installations with new customers − Vessels up 44% or by 1,887 to 6,219 (including 5,375 FX vessels) − ARPU down 17% to $2,
Slide 17: Government 2018 results
Government 2018 results Full Year Revenue & EBITDA ($m) Total Government revenue up $14.7m to $381.0m US revenue up 6.4% − New business wins 450 − Increased customer expenditure under existing contracts 400 − Material increase in underlying revenues on Boeing ToP 350 381.0 Revenue down 1.1% ou
Slide 18: Aviation 2018 results
Aviation 2018 results Full Year Revenue & EBITDA ($m) Aviation revenue up 40.9% or $74.3m to $256.1m Core IFC IFC revenues up 105% or $52.0m to $101.3m 180 Revenue EBITDA Revenue EBITDA − $49.3m equipment revenue 160 − $52.0m airtime revenue (including 7.1m GX airtime) 140 154.8 143.4 − 1,580 ai
Slide 19: Aviation IFC quarterly revenue and cash flow
Aviation IFC quarterly revenue and cash flow 2017 2018 40 $m 30 20 10 0 -10 -20 -30 -40 Revenue -50 Operating Cash Flow -60 Steadily improving trends in revenue and operating cash flow 19
Slide 20: Enterprise 2018 results
Enterprise 2018 results Full Year Revenue ($m) Revenue down $2.6m, 2.0%, to $130.0m 33.1 28.6 27.8 Satellite phones up 30.0% to $39.9m 25.3 19.8 BGAN down 9.0% to $25.3m 18.3 2017 2018 5.5 6.0 M2M revenues up 7.6% to $19.8m 16.6 30.8 10.9 39.9 Fixed to Mobile down 34.3% to $10.9m BGAN GSPS
Slide 21: Group Cash Flow
Group Cash Flow US$m 2018 2017 Change Q4 2018 Q4 2017 Change EBITDA 770.1 739.3 30.8 190.6 166.3 24.3 Working capital (61.6) 30.7 (92.3) 1.7 33.7 (32.0) Non-cash items 4.9 19.8 (14.9) - 0.4 (0.4) Operating cash flow 713.4 789.8 (76.4) 192.3 200.4 (8.1) Capital expenditure (590.7) (614.1) 23.4 (175.4
Slide 22: Capital Expenditure
Capital Expenditure US$m 2018 2017 Change Q4 2018 Q4 2017 Change Major infrastructure projects 333.5 423.5 90.0 107.6 179.3 71.7 Success-based capex 80.4 112.0 31.6 19.1 19.0 (0.1) Other 115.3 115.2 (0.1) 47.0 20.1 (26.9) Cash flow timing 61.5 (36.6) (98.1) 1.7 (13.5) (15.2) Total cash capital expen
Slide 23: Net debt at end of 2018
Net debt at end of 2018 $1,039m liquidity at end of 2018 2,078.6 Net debt 2,176.7 − Cash $289m 2,500 395.1 +0.7 − Revolving Credit Facility $750m 395.8 2,000 Leverage 994.9 +1.2 996.1 1,500 − Net Debt to normally be <3.5x EBITDA 1,000 555.0 +14.4 569.4 − 2.8x at end of 2018 (2017: 2.8x) 500 616.
Slide 24: Future Guidance
Future Guidance Medium term guidance unchanged New 2021 capex and 2019 revenue guidance 2019 Revenue Medium term revenue, Capex: (excluding Ligado): EBITDA & Free Cash Flow (excluding Ligado): Capex of $500m to $600m pa in 2019 Expected to be between $1,300m and 2020 and $1,400m Targeting mid-
Slide 25: Q&A
INMARSAT > FY 2018 Results Q&A
Slide 26: Forward looking Statements
Full Year Results 2018 7 March 2019 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 act