SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — Investor Day (June 2016)
130 slides from SES SA FDR (Class A)'s investor day presentation, Jun 21, 2016
Slide 1: Investor Day 2016: beyond frontiers
Investor Day 2016 beyond frontiers 21 June 2016 Investor Day 2016
Slide 2: Agenda
Agenda Corporate perspective Karim Michel Sabbagh, President and CEO Video Ferdinand Kayser, CCO Enterprise Aslan Tricha, SVP & MSC Leader (Enterprise) Mobility Elias Zaacack, SVP & MSC Leader (Mobility) Global government Nicole Robinson, VP & MSC Leader (Government) U.S. government Pete Hoene, CEO
Slide 3: Corporate perspective
Corporate perspective Karim Michel Sabbagh, President and CEO Investor Day 2016
Slide 4: Executing differentiated strategy to deliver sustainable growth
Executing differentiated strategy to deliver sustainable growth Delivering a scalable and global satellite-enabled network Focusing on value-added, end-to-end solutions in four key market verticals, where SES is well positioned to accelerate Innovating at all levels of the business to create f
Slide 5: Strong growth outlook for satellite in all four verticals
Strong growth outlook for satellite in all four of SES’s verticals Global capacity revenues by vertical(1) USD 5 billion in additional satellite capacity USD billion revenues to be captured by 2020 17.8 (+39%) Video key growth drivers: +13% CAGR • Transition from SD to HD +54% CAGR 12.8 • Furthe
Slide 6: Further growth potential from delivering value-added services
Further growth potential from delivering value-added services Global back-end video services revenues(1) USD 15 billion in additional services revenues USD billion to be captured by 2020 24.4 (+53%) Generating additional “pull through” 15.9 opportunities Enhancing a key differentiator for SES
Slide 7: Globalising the business
Globalising the business SES’s global satellite network Developing the strongest, most scalable and flexible hybrid platforms Over 50 GEO Plus 12 MEO • Ubiquitous and flexible global coverage satellites satellites • Robust global ground network Over 20 Over 20 office • Complemented by local presen
Slide 8: Focusing on four verticals
Focusing on four verticals Building the strongest, most scalable platforms across each market vertical Prime neighbourhoods with significant technical reach Leading share in global HD/UHD; providing media solutions for End-to-end services across linear and non-linear distribution Video 1,000 c
Slide 9: Enabling markets through end-to-end solutions
Enabling markets through end-to-end solutions SES – from infrastructure to holistic solutions Integrated space and ground assets are essential to providing end-to-end solutions Backend Infrastructure Experience provider provider provider Accelerating the scalability of resources downstream Fas
Slide 10: Seizing leading position and synergies by moving to 100% of O3b
Seizing leading position and synergies by moving to 100% of O3b Adding unique and complementary products and solutions Generating IRR in excess of SES’s hurdle rates, and enhancing return on existing investment Accelerating transformational and combination synergies not possible under a 50.5%
Slide 11: Having foremost at industry foresight
Having foremost at industry foresight SES’s way of working New foresight on the future of Video, Enterprise, Mobility and Government New investments across the value Be bold and chain, while remaining compliant with perseverant SES’s financial framework Think ahead New partnership models to st
Slide 12: Sleeves rolled up in innovation and delivery
Sleeves rolled up in innovation and delivery SES’s way of working Expanding capability systems across the value chain Deploying globally SES’s capabilities Be bold and and facilitating timely customisation perseverant Think ahead Evolving business models, while retaining the principles of SES’
Slide 13: Developing and bringing the best of SES globally
Developing and bringing the best of SES globally SES’s way of working Unrestricted commitment to serve clients globally • Global networks Be bold and perseverant • Global capabilities Think ahead • Global talents • Global mobilisation Roll up your Develop and bring sleeves the best of SES worldwid
Slide 14: SES's growth markets: Video
SES’s growth markets: Video Ferdinand Kayser, CCO Investor Day 2016
Slide 15: Strong growth potential from globalising SES's video business
Strong growth potential from globalising SES’s video business TV households in emerging markets(1) Significant audience growth driving demand for Millions new video platforms in emerging markets +206 (+22%) 1126 Growing audiences demanding more choice 920 and more TV channels SES expanding in
Slide 16: Driving growth from the transition to HD and Ultra HD
Driving growth from the transition to HD and Ultra HD Global HDTV channels over satellite(1) Increasing demand for higher quality viewing Number experience +9,588 (+181%) +3,757 • TV screen sizes >49” represent the biggest growth 14,897 (+102%) segment(2) 7,419 5,309 3,662 Higher quality signals
Slide 17: Enabling higher quality content with compression
Enabling higher quality content with compression Higher signal quality requires more capacity(1) HDTV channels broadcast by SES satellites Transponders required to broadcast ten TV channels Number 32.5% of total SES channels ~5 txps (7,309) 2,375 23.1% of total SES channels ~2½ txps (5,210) 1,202 ~1
Slide 18: Providing scalable, global solutions
Providing scalable, global solutions 50 pay-TV and FTA platforms Supporting over 500 broadcasters/operators New platforms since 2010 317 million households 7,309 TV channels (+61 million since 2011) (+44% since 2011) 32.5% HD penetration 120 VoD platforms (2011: 23.1%) Investor Day 2016 18
Slide 19: Scaling up SES's global video offering
Scaling up SES’s global video offering 2011 2016 Liberalising the 256 million TV 317 million TV 1 broadcast environment households households Facilitating the digital 2 switchover 5,210 TV channels 7,309 TV channels Enabling the move to 3 23.1% HD penetration 32.5% HD penetration higher quality Deli
Slide 20: Delivering differentiated, holistic solutions
Delivering differentiated, holistic solutions SES already delivering end-to-end solutions for major customers Backend Provider Infrastructure Provider Experience 3 million TV households in Germany Provider Investor Day 2016 20
Slide 21: Offering scalable, linear/non-linear end-to-end solutions
Offering scalable, linear/non-linear end-to-end solutions Media Tool Box Core DTH Core OTT SES well placed to deliver end-to-end hybrid solutions Broadcast Digital rights Backend services management Provider Providing all the technical Conditional Live and VoD elements to deliver content access
Slide 22: Complementing satellite's competitive advantages
Complementing satellite’s competitive advantages Average daily linear TV viewing times(1) Linear TV consumption remains stable Minutes Satellite delivers compelling advantages: 251 252 241 • 100% global coverage 190 • Consistent and high quality bandwidth 189 187 • Highly cost-efficient delivery
Slide 23: Case studies: complementing satellite with OTT
Case studies: complementing satellite with OTT Task Task Create a financially viable model for German FTA TV Create a pan-European TV Broadcast and VoD platform for broadcasters to broadcast content in HD quality expatriates in Europe Extend to multi-screen distribution Implement complete en
Slide 24: Shaping the future by innovating at all levels
Shaping the future by innovating at all levels Expanding in fast-growing emerging markets Space SES-9 (Asia)/SES-10 (Latin America): +80 txps Developing new DTH platforms (e.g. West Africa) Platform HD+ grown to 1.9 million paying subscribers(1) Anytime, anywhere and any screen Application
Slide 25: Accelerating SES's future-proof differentiation
Accelerating SES’s future-proof differentiation Three key principles: Prime neighbourhoods and substantial technical reach Distinct infrastructure Complemented by world-leading media solutions provision to holistic solution Rapidly scaling up SES’s capabilities globally Complementing infrast
Slide 26: Becoming the first choice for delivery of global video content
Becoming the first choice for delivery of global video content Growing SES’s prime neighbourhoods and substantial technical reach Enhancing SES’s hybrid capabilities and ancillary services globally 127 million DTH homes >500 global broadcasters & Satellite 148 million operators Cable homes 42 mi
Slide 27: SES's growth markets: Enterprise
SES’s growth markets: Enterprise Aslan Tricha, SVP & MSC Leader for Enterprise Investor Day 2016
Slide 28: Strong growth potential in global enterprise
Strong growth potential in global enterprise Satellite capacity revenues(1) Connectivity adoption is a growth enabler USD billion Satellite services growing in relevance within 2.6 the global IP traffic explosion 2.3 • Providing reach to reduce connectivity gap 0.5 1.3 - Worldwide ICT developmen
Slide 29: Reshaping SES's Enterprise business to changing market dynamics
Reshaping SES’s Enterprise business to changing market dynamics Reshaping SES’s Enterprise business with enhanced product offerings Expanding commercial relationships with ‘tier one’ telcos/MNOs and channels Delivering Enterprise+ managed solutions to optimise the Capacity value per applicatio
Slide 30: Driving growth from backhaul services
Driving growth from backhaul services Sites share by BTS technology(1) Monetising demand from 3G and 4G/LTE % of sites sites by providing competitive solutions with HTS 35% 75% • 10 to 40 times traffic growth per site with 3G/4G/LTE, compared to 2G • Robust solutions to handle complex network 2015
Slide 31: Providing scalable, global solutions
Providing scalable, global solutions SES’s global Enterprise solutions Partnering with major global customers Telco+ Wireless+ Enterprise+ Service Provider+ 11 SES-managed IP platforms serving Europe, Asia, Americas and Africa Over one million simultaneous fixed internet connections supported by SES
Slide 32: Scaling up SES's global enterprise offering
Scaling up SES’s global enterprise offering 2011 2016 1 Increasing the connectivity reach in 21% of households 35% of households developing markets with internet with internet 2 Facilitating the network proximity 15 Teleports 25 Teleports - Nodes 25 PoP >3,000 PoP - Customer connectivity points - Ne
Slide 33: Delivering differentiated, holistic solutions
Delivering differentiated, holistic solutions SES already delivering end-to-end solutions for major customers Infrastructure Provider Network Platform Service Provider Investor Day 2016 33
Slide 34: Shaping the future by innovating at all levels
Shaping the future by innovating at all levels Global GEO HTS platform (equivalent to 250 TPEs) Space O3b unique MEO HTS constellation Global IP/MPLS network roadmap deployment Platform Building a future-proof carrier-grade routing platform Fostering the Internet of Things ecosystem Applic
Slide 35: Accelerating SES's future-proof differentiation
Accelerating SES’s future-proof differentiation Three key principles: Investing in HTS and next gen data network capabilities Distinct infrastructure Delivering complete suite of enterprise solutions globally to holistic solution Enhancing satellite solutions with hybrid features Complementi
Slide 36: Providing value in delivering global enterprise solutions
Providing value in delivering global enterprise solutions Delivering tailored solutions on a regional, national, and/or local level for customers Coverage Global Regional National Local SES enterprise offerings Scale Product attributes Service Provider+ Enterprise+ Flexibility Telco+ Customi
Slide 37: Case study: Providing a turnkey solution for Facebook in Africa
Case study: Providing a turnkey solution for Facebook in Africa Task Benefit Support Facebook’s Express Wi-Fi Complete and tailored solution deploying programme roll-out in Sub-Sahara customer-specific protocol enhancement features Africa Implementation Simplified customer front- end solution
Slide 38: Case study: Delivering Hybrid Broadband in Asia
Case study: Delivering Hybrid Broadband in Asia Allowing telcos/MNOs and ISPs to deliver broadband services to underserved areas, while leveraging their core network investment Enterprise+ Hybrid Broadband enables enhanced broadband connectivity: • Superior end-user experience for underserved ar
Slide 39: SES's growth markets: Mobility
SES’s growth markets: Mobility Elias Zaccack, SVP & MSC Leader for Mobility Investor Day 2016
Slide 40: Substantial growth outlook in Mobility
Substantial growth outlook in Mobility Number of connected planes(1) Growth driven by explosion in passengers carrying Number of in-service terminals smartphones, tablets and laptops 25,929 Dramatic rise in airlines deploying IFC, and resulting surge in connected aircraft over next decade in all
Slide 41: Passengers expecting a home-equivalent quality of service
Passengers expecting a home-equivalent quality of service Importance of moving with changing consumer demand patterns supports SES’s technology approach Yesterday Today Tomorrow Ku wide beam and HTS Satellite L-band GEO Ku/Ka HTS, MEO Ka spot beams Metamaterial & conductive Antenna Flat aperture P
Slide 42: Providing a scalable and optimised global solution
Providing a scalable and optimised global solution Supporting global service providers/companies SES HTS Coverage, projected by 2018 Investor Day 2016 42
Slide 43: Delivering differentiated, holistic solutions using SES GEO and O3b
Delivering differentiated, holistic solutions using SES’ GEO and O3b SES already delivering end-to-end solutions for major customers AERO MARITIME Infrastructure Provider Network Platform Service Provider For clients on a selected basis Investor Day 2016 43
Slide 44: Case study: SES's differentiated global in-flight solution
Case study: SES’s differentiated global in-flight solution SES’s global aero capabilities well placed to deliver optimal IFE/IFC solutions In-flight connectivity Safety/operational and In-flight entertainment emergency services HD video streaming Electronic flight bags Live TV Browsing A
Slide 45: Case study: Delivering seamless connectivity with SES Maritime+
Case study: Delivering seamless connectivity with SES Maritime+ Leisure Merchant Cruise Gilat 60cm Intellian 1m Seatel 2.4m • Lower throughput requirements • Medium throughput requirements • High throughput requirements • Integrated ACU, GPS, LNB, BUC, • GPS, ABS, Fast switching • GPS, Auto Polariza
Slide 46: Shaping the future by innovating at all levels
Shaping the future by innovating at all levels global GEO HTS platform (equivalent to 250 TPEs) unique MEO-based network Space Unmatched combined infrastructure Open architecture and centralised NMS for global network Platform roaming Ability to support multiple sub-networks, and SLAs High thr
Slide 47: Accelerating SES's future-proof differentiation
Accelerating SES’s future-proof differentiation Three key principles: Combining wide-beam infrastructure, with new GEO-HTS and O3b to Distinct infrastructure create a unique value proposition Targeting cruise sector with hybrid offering support high user-demand, to holistic solution while ensuri
Slide 48: SES's growth markets: Global government
SES’s growth markets: Global government Nicole Robinson, VP & MSC Leader for Government Investor Day 2016
Slide 49: Global government market perspective
Global government market perspective Global government/military capacity growth(1) Diversifying SES’s global government portfolio to 2014 2024 support growth FSS capacity 470 TPE 615 TPE Adapting channel strategy to varying procurement systems FSS revenue USD 0.8 billion USD 1.2 billion • Provis
Slide 50: SES's Global government reach
SES’s Global government reach Serving 57 government entities today in 28 countries (including 13 U.S. government agencies) International government portfolio Growth doubled from 2014 to 2015 markets Existing Strategic focus on growing in new government government markets business Investor Day
Slide 51: Developing a complete ISR catalog
Developing a complete ISR catalog Satellite bandwidth required for UAV platforms ISR a key growth driver Mbit/s SES building a catalog of offerings and expertise >100 globally 10-50 3-5 5-10 Predator Reaper Global Next-Gen Hawk UAVs Tier II+ (Group 5) High Altitude Tier II (Group 4) Long Enduran
Slide 52: Delivering differentiated, holistic solutions
Delivering differentiated, holistic solutions Delivering scalable solutions from space segment to end- to-end secure network solutions to dedicated satellite Infrastructure design Provider • Critical infrastructure Kativik Government: delivering 12 txps of SES capacity to enable critical connectiv
Slide 53: Case study: enhancing connectivity for the Kativik government
Case study: enhancing connectivity for the Kativik government Kativik Regional government in Canada awarded SES a contract for the delivery of new satellite services across the northern Quebec region Displacing long-time incumbent, to deliver critical C-band communications capability to more tha
Slide 54: Shaping the future by innovating at all levels
Shaping the future by innovating at all levels Global GEO HTS platform (equivalent to 250 TPEs) O3b unique MEO HTS constellation Space Military frequency satellite GovSat-1 for government missions Five hosted payloads for four government agencies Protecting live networks to deliver high qu
Slide 55: Accelerating SES's future-proof differentiation
Accelerating SES’s future-proof differentiation Three key principles: Sharply informing fleet development plans to meet growing needs of Distinct infrastructure global government customers (frequency, coverage and throughput) Building products and catalogues of requirements-driven capabilities t
Slide 56: SES's growth markets: U.S. government
SES’s growth markets: U.S. government Pete Hoene, CEO of SES Government Solutions Investor Day 2016
Slide 57: U.S. government defense spending and SES GS performance
U.S. government defense spending and SES GS performance U.S. Defense budget(1) U.S. government budget stabilising USD billion • Most of cuts occurred in 2012-2015, but Budget will remain tight through to 2017 687 • Overseas Contingency Operations Funding augments DoD base funding; future value to
Slide 58: Scalable strategy serving USG SATCOM requirements
Scalable strategy serving USG SATCOM requirements Distribution of U.S. government SATCOM pipeline/demand Supporting U.S. government missions worldwide • Securing significant new business and have a robust pipeline of opportunities Underlying demand is strong globally Core business remains stab
Slide 59: Delivering differentiated, holistic solutions (Trojan)
Delivering differentiated, holistic solutions Multi-band Worldwide End- to-End SATCOM Infrastructure Services Provider Teleport Teleport Teleport Teleport Teleport Teleport SES PoP SES PoP SES PoP SES PoP SES PoP SES PoP GLOBAL Enterprise MPLS NETWORK Network Platform Gov’t PoP Gov’t PoP ▲ SES GS de
Slide 60: Delivering differentiated, holistic solutions (O3b American Samoa)
Delivering differentiated, holistic solutions O3b Installation NWSO Pago Pago, American Samoa Infrastructure Hawaii Provider American Samoa Network Platform ▲ NWS Office Pago Pago requested SES GS deliver O3b solution to American Samoa to support tropical weather alerts and warnings ▲ Key requiremen
Slide 61: Shaping the future by innovating at all levels
Shaping the future by innovating at all levels Improving SATCOM performance, maximising operational availability and delivering world-class solutions Global GEO fleet and future HTS services (SES-12/SES- 14/SES-15) provide USG with resilient SATCOM Space Adds ‘game-changing’ capabilities to SE
Slide 62: Accelerating SES's future-proof differentiation
Accelerating SES’s future-proof differentiation Three key principles: Evolution of stand-alone, highly customised networks to enterprise, end-to-end solutions addressing multiple customer Distinct infrastructure requirements (e.g. transition of US Army’s Trojan network) to holistic solution Shap
Slide 63: SES's growth accelerators: O3b Networks
SES’s growth accelerators: O3b Networks Steve Collar, CEO of O3b Networks Investor Day 2016
Slide 64: O3b: The Fastest Growing Satellite Operator in History
O3b – The Fastest Growing Satellite Operator in History More than 23 Gbps of Achieved EBITDA capacity under contract O3b is the largest break-even in 1H 2016 operator in the Pacific Half of O3b’s Fiber in 43 customers in the sky Early Pre customers have service on O3b Sales upgraded bandwidth in the
Slide 65: No.1 in The Pacific
No.1 in The Pacific – 5 Gbps under contract, 50% islands connected Timor Telecom, East Timor Digicel, PNG Telecom Cook Islands, Cook Islands Telecom Cook Islands, Cook Islands PNCC, Palau Norfolk Telecom, Norfolk Island Improved QoE Increased ARPU Reduced churn Improved reliability Investor Day 2016
Slide 66: No.1 in Cruise
No.1 in Cruise – Changed the Maritime and Cruise Industry Investor Day 2016 66 O3b Networks Proprietary
Slide 67: 43 customers worldwide are live across the O3b Network
43 Customers worldwide are live across the O3b Network.. Investor Day 2016 67 O3b Networks Proprietary
Slide 68: Delivering customers an integrated, fully managed solution
Delivering customers an integrated, fully managed solution O3b Space Segment PoP Carrier WAN Customer WAN Dermarc-A Remote Terminal Dermarc-Z O3b Gateway One $/Mbps Price, One SLA across the network Technical support Field Level Maintenance Preventive Maintenance Site Survey Advanced Replacement Col
Slide 69: Telco: The Pacific's largest Telco encouraging O3b to add value
Telco - The Pacific’s largest Telco encouraging O3b to add value Digicel Pacific has increased capacity by Rapid growth in 550% in 15 months number of sites • More than 3 Gbps under contract • 6 sites across the Pacific • Optimising Digicel’s network • Driving predictive metrics • Implementing new p
Slide 70: Maritime: RCCL and O3b since 2011
Maritime - RCCL and O3b since 2011 August 2013 – First Live Demo to RCCL Executive Board January 2014 December 2014 * April 2015 O3b branded Service for RCCL Investor Day 2016 70 O3b Networks Proprietary
Slide 71: Direct relationships with end users drive rapid service evolution
Direct relationships with end users drives rapid service evolution, in-house innovation and delivers high value 10 Ships Oasis of the Seas Caribbean, Med Caribbean only and Asia Dynamic Shared Follow the Ship Capacity Fully Managed Bandwidth Only Solution Investor Day 2016 71 O3b Networks Proprietar
Slide 72: Energy: O3b now offshore in Gulf of Mexico
Energy - Following successful deployment onshore with Shell and Chevron, O3b now offshore in Gulf of Mexico First offshore High expectations from Onshore deployments deployment on the BHP FPSO offshore markets went live in 2015 Shenzi platform in GoM Investor Day 2016 72 O3b Networks Proprietary
Slide 73: Government: O3b is changing the government landscape
Government - O3b is changing the government landscape Providing Unprecedented Speed and Performance on Land and at Sea Better Situational Network Centric Humanitarian Improving Troop Awareness Operations Mission Support Morale Investor Day 2016 73 O3b Networks Proprietary
Slide 74: What's Next? An expanding use case for fiber-like satellite
What’s Next? - An expanding use case for “fiber like” satellite Connect people in need Entertainment = internet Intelligence 1 Gbps Recovery 200 Mbps Airplane 100 Mbps UAV 2016 500 Mbps Event 100 Mbps Public Safety 1 Gbps Next Big Thing Rich media experience Situational Awareness Next generation… In
Slide 75: O3b has quickly established unique capabilities
O3b has quickly established unique capabilities and developed core building blocks to leverage for future growth Trunk Oil & Gas Gov Cell Maritime O3b Capabilities & Skills 1 2 3 4 5 Efficient, Scalable Vertical Managed Service Perfected Operational Constellation Focus Capability Spectrum System Wit
Slide 76: Building Scale and Leveraging Time to Market Advantage
Building Scale and Leveraging Time to Market Advantage Investor Day 2016 76 O3b Networks Proprietary
Slide 77: Strong financial development at O3b
Strong financial development at O3b - $1.3bn financed over the last 18 months - but benefits of consolidation obvious (1) Full acquisition by SES will halve cost of debt and substantially reduce operational complexity 1) Gross debt Investor Day 2016 77 O3b Networks Proprietary
Slide 78: Strong Execution and Revenue Delivery
Strong Execution and Revenue Delivery $55M in revenue in 2015 in first full year of operation and on course to more than double in 2016 400 385 350 315 300 255 250 232 Growing at revenue CAGR of 43% over next 5 years 200 192 150 130 115 100 54 50 28 16 0 0 -50 -30 -65 -67 -100 EBITDA break-even achi
Slide 79: SES's growth accelerators: HTS+
SES’s growth accelerators: HTS+ Christophe de Hauwer, CDO Investor Day 2016
Slide 80: HTS is a cornerstone of SES's Data strategy
HTS is a cornerstone of SES’s Data strategy Lower cost per bit pricing poised to Leveraging the ability of HTS infrastructure to offer unlock growth lower prices per bit Unlocking new markets, applications and customers Creating differentiation relevance by having a deep Majority of infrastruc
Slide 81: HTS serves clients in all Data verticals and all regions
HTS serves clients in all Data verticals and all regions GEO-w GEO-HTS MEO-HTS GEO GEO MEO Application wide HTS HTS beam Corporate Low High networks density density Enterprise Low speed High Max broadband & density speed speed Enterprise Mobility Government Products/Solutions Products/Solutions Prod
Slide 82: Not all HTS systems are created equal
Not all HTS systems are created equal SES adopting a differentiated approach to HTS Backward • Locking in anchor customers and backlog to de-risk investments compatibility • Differentiating using O3b's low-latency/high throughput capabilities • Future-proofing SES’s investments by incorporating th
Slide 83: Relentlessly pursuing differentiation
Relentlessly pursuing differentiation Normalised wholesale capacity revenues per Differentiation is the prerequisite to Gbps index(1) serve market segments in a relevant (Broadband = 1) manner, and with commensurate 33 economics Broadband = 1 HTS enabling new data applications with higher bandwi
Slide 84: HTS offering the unique combination of GEO and MEO
HTS Offering the unique combination of GEO and MEO Infrastructure Network Platform Service Provider Provider Provider Satellite Teleport Hub Network Service End user capacity facility infrastructure operations provider Today and Tomorrow Combined infrastructure, network, platform and solution delive
Slide 85: Strong strategic rationale for taking full control
Strong strategic rationale for taking full control Expandingthrough [] Augmenting through Globalisation Verticalisation O3b is global by design O3b offers managed service O3b accelerates the expansion solutions to serve global of SES’s International revenue requirements across Enterprise, base Mobi
Slide 86: Accelerating EUR 106 million of synergies
Accelerating EUR 106 million of synergies Consistent delivery of substantial synergies EUR 53 million in 2017 rising to EUR 106 million EUR million in 2021 106 Combinational and transformational synergies • Commercial 86 24 • Product Development 14 5 5 12 • Operational 7 53 • Financial 5 5 82 3
Slide 87: Financial, operational, product and procurement synergies
Financial, operational, product and procurement synergies EUR 60 million of financial synergies (2019) • Reducing significantly O3b average cost of debt from 9.5% to SES average cost of debt of 4% Ground Infrastructure EUR 7 million of operational synergies (2019) • Operational synergies across
Slide 88: Commercial synergies
Commercial synergies EUR 14 million of commercial synergies O3b and SES complementary services unlock (2019) new synergies Cross fertilising sales to gain market share Cross fertilising products – SES and O3b combined network is unmatched in the industry and will provide a differentiated suite
Slide 89: HTS demand is growing in line with global IP traffic
HTS demand is growing in line with global IP traffic Global IP traffic growth(1) EB/month -9/10/12/14/15/16 200 150 EUR 250 - 300 million of potential 100 annualised revenue by 2021(3) 50 (Up to 15% of SES FY 2015 revenue) 0 2015 2016 2017 2018 2019 2020 Fixed Internet Managed IP Mobile data GEO & n
Slide 90: SES's growth accelerators: Media Solutions
SES’s growth accelerators: Media Solutions Wilfried Urner, CEO of SES Platform Services & MSC Leader for Video Investor Day 2016
Slide 91: How services are complementing our satellite infrastructure
How services are complementing our satellite infrastructure 1985 SES incorporation Liberalisation of broadcast environment Europe’s first private SPS acquisition satellite operator Back-end services Analogue to digital provision in Europe switch-over 2004 Launch of HD+ bouquet RR Media acquisition C
Slide 92: Providing comprehensive end-to-end media capabilities
Providing comprehensive end-to-end media capabilities SES offers a full range of conventional and online video services to clients Infrastructure Experience Content Production Back-end Provider Consumption Provider Provider Content Broadcast Online Video Satellite DTH Pay TV Appliances
Slide 93: Globalising SES's media services and solutions
Globalising SES’s media services and solutions 97% of SES PS revenue from Europe; ~⅔ of RR Media revenue outside of Europe Providing global back-end services, based on local capabilities and innovative virtual solutions 16 Offices Over 900 media customers globally Over 1,000 TV channels distribu
Slide 94: Solid differentiation potential from other industry players
Solid differentiation potential from other industry players SES best positioned to fulfil requirements for comprehensive media service delivery Satellite Media solution operators providers (A) Distribution Infrastructure Satellite capacity [owned] [leased] [own] Online distribution capabilit
Slide 95: Media toolbox
Media toolbox Media Toolbox offers User Experience a wide range of developed components and workflows for ▲ DTH / DTC ▲ Multiscreen (Sat>IP) ▲ Online Video Experience of SES industry experts ensures to deliver cutting-edge technology for your content business to realise the best user experience Medi
Slide 96: Providing a turnkey solution is the best way to approach customers
Providing a turnkey solution is the best way to approach SES’s existing and new customers Back-end services Platform implementation • SOLID satellite services • LUCID OTT distribution • HD+ • FLUID content management • West-Africa Platform • Home:TV Features • UHD North America Platform • Linear, ca
Slide 97: Case study: shaping the video market in West Africa
Case study: shaping the video market in West Africa Task Benefit ▲ Foster the satellite neighbourhood with ▲ Professional one-service approach for highly professional ground services: prospects in the region, allowing African local and national TV broadcasters to concentrate • Classic TV broadcastin
Slide 98: Case study: complementing satellite with terrestrial
Case study: complementing satellite with terrestrial ▲ Creating a pan-European TV Broadcast and VoD platform for expatriates in Europe ▲ Providing turnkey solution and allowing HOME:TV to concentrate on its core business Content Program / Delivery via Processing & Playout / CAS / Marketing & Billing
Slide 99: Growth potential on all parts of the value chain
Growth potential on all parts of the value chain ▲ SES’s world-leading media services provider well placed as a key growth accelerator Next generation back-end Infrastructure provision Traditional Back-end provision provision Satellite capacity revenue Playout, MAM and teleport OVP and ancillary ser
Slide 100: SES technology framework
SES technology framework Martin Halliwell, CTO Investor Day 2016
Slide 101: Robust foundation of fleet and ground segments
Robust foundation of fleet and ground segments SES’s global satellite fleet and access network Industry-leading network performance: Unsurpassed technical understanding: >99.99% network availability 8.9/10 rating of SES’s technical excellence in customer service Investor Day 2016 101
Slide 102: Expanding in a scalable and flexible manner
Expanding in a scalable and flexible manner 2016 2017 SES-10 SES-11 SES-12 SES-14 SES-15 SES-16 Fully Payload type Shaped Shaped Shaped Shaped Shaped steerable HTS payload 14 GHz 12 GHz 10 GHz Digital processing 2.6 GHz 2.5 GHz Satellite propulsion Chemical Chemical Electric Electric Electric Chemic
Slide 103: Case study: delivering scalable and flexible satellite coverage
Case study: delivering scalable and flexible satellite coverage SES-14 (Latin America) delivers flexible, hybrid capacity and capabilities C-band coverage for video Ku-band wide-beam and HTS for IFC/IFE Supporting NASA-funded GOLD hosted-payload C-band (wide beam) coverage Ku-band (spot beam
Slide 104: Driving further efficiencies through innovation
Driving further efficiencies through innovation Conventional discrete Fully digitised Fully digitised payload component payload satellite payload Modular satellites Satellite life extension Access to space Replacing >1,000 frequency converters, switches and filters Eliminating 100’s of metres in
Slide 105: Driving further efficiencies through innovation: modular satellites
Driving further efficiencies through innovation Rendezvous Fully digitised Courier proceeds courier with satellite payload to host’s host position Modular satellites Satellite life Transfer payload to extension host Courier Launch proceeds to courier its position Access to space with extra Courier o
Slide 106: Driving further efficiencies through innovation: life extension
Driving further efficiencies through innovation Fully digitised Method one: satellite payload Re-fueling vehicle meets satellite Modular satellites Satellite life extension Method two: Buddy satellite attached to satellite Access to space Satellites often remain operable well beyond fuel depletion
Slide 107: Driving further efficiencies through innovation: access to space
Driving further efficiencies through innovation Fully digitised satellite payload Modular satellites Satellite life extension Source: SpaceX SpaceX building rockets faster, increasing launch frequency Access to space Re-using rocket’s first stage could reduce cost further Modular design and mo
Slide 108: Executing a future-proof approach
Executing a future-proof approach Establishing satellite at the heart of the digital ecosystem Future Exchangeable payloads 2019 in orbit Fully processed Advanced launch Now payloads Programmable Electric propulsion Full digitisation transponders Selective payload Re-usable launch
Slide 109: Enabling SES's market verticals
Enabling SES’s market verticals Diverse, cost-effective and timely Video access to space Integrating agile, adaptable capacity into the customer’s network Enterprise Reducing cost per bit and in-orbit price Mobility Ubiquitous coverage and flexible capacity allocation Extending the life of SES’s spa
Slide 110: SES financial framework
SES financial framework Padraig McCarthy, CFO Investor Day 2016
Slide 111: Executing growth strategy within a disciplined financial framework
Executing SES’s growth strategy within a disciplined and consistent financial framework Delivering … robust profitability and financial returns Self-funding … profitable, organic growth Profitable … execution of selective M&A growth Optimising … financing decisions and prudent use of cash Investor D
Slide 112: Robust profitability: Globalisation
Delivering robust profitability and financial returns: Globalisation Group revenue by region (at constant FX and same scope) EUR million +2.5% (Digital +4.5%) CAGR ▲ Strong revenue CAGR of +8% in 2000 30% +8% CAGR international region from 2007 to 1500 19% 2015 19% -2% CAGR 28% ▲ Significant margin
Slide 113: Robust profitability: Verticalisation
Delivering robust profitability and financial returns: Verticalisation Group revenue proportionality by vertical (at constant FX and same scope) Y-on-y growth -3.2% ▲ Accelerating Mobility growth in 4% 2% 2% 3% +24.5% aeronautical segment and generating 12% 13% +3.3% strong backlog 18% 15% -19.2% ▲
Slide 114: Robust profitability: Innovation
Delivering robust profitability and financial returns: Innovation Normalised CapEx development (at same scope) EUR million ▲ Economies of scale and design reduce 600 Normalised CapEx by 16%(1) 540 535 (1) 515 475 495 ▲ Scope extension (SES-16 and HTS 455 435 capacity) adds EUR 40 million p.a. once s
Slide 115: Robust profitability: Services
Delivering robust profitability and financial returns: Services European Services businesses returns(1) 30% 26% Services business % • Represents 26% of total revenue 20% 18% • Procures transponder capacity 10% • Delivers growing returns 5% 3% 0% • Is accretive to SES group returns 2009 2010 2011 2
Slide 116: Robust profitability: Foundations
Delivering robust profitability and financial returns: Foundations Backlog development(1) EUR billion 7.6 7.5 6.8 ▲ Strong backlog supports future revenue ▲ Average contract length of over eight years 2011 2013 Q1 '16 Free Cash Flow development (FCF) 890 EUR million 726 ▲ FCF improvement driven by t
Slide 117: Self-funding organic growth: GEO CapEx and capacity
Self-funding profitable, organic growth: GEO - CapEx and capacity SES’s future capital expenditure profile EUR million 740 Total 2016-2020: EUR 2.8 billion(1) 120 ▲ Average IRR on last 20 satellite 570 60 475 475 500 programmes of approximately 14% 130 60 ahead of minimum hurdle rate of 10% 560 365
Slide 118: Self-funding organic growth: GEO Revenue
Self-funding profitable, organic growth: GEO - Revenue 2016 2017 2018 Global Video SES-9(1) and SES-10 EUR 250 - 300 Next Generation million of Enterprise & Mobility SES-12, SES-14, SES-15 potential (wide-beam / HTS) annualised revenue by 2021(2) (Up to 15% of SES Next Generation FY 2015 revenue) Go
Slide 119: Selective M&A growth: GEO - RR Media
Profitable execution of selective M&A growth: GEO - RR Media Revenue contribution by region and revenue % / EUR million SES PS(1) MediaCo(2) ▲ MediaCo pro forma doubles revenue ▲ Pro forma EBITDA margin of MediaCo of 2% 30 approximately 20% % 240 ▲ MediaCo transponder “pull-through” of 120 70 EUR 12
Slide 120: Selective M&A growth: MEO - O3b Highlights
Profitable execution of selective M&A growth: MEO - O3b Highlights Acquisition exemplifies lowest risk possible M&A SES move SES to pay USD 730 million to increase ownership from 49.1% to 100% to 100% Brings cumulative investment to USD 1 billion (EUR 0.9 billion) stake in On completion, SES
Slide 121: Selective M&A growth: MEO - O3b Revenue
Profitable execution of selective M&A growth: MEO - O3b - Revenue O3b’s satellite fleet targeted to reach a 20-satellite constellation by 2020 Number of O3b satellites in operation and as in-orbit back-up Revenue per satellite(1): USD 25 - 32 million Revenue per satellite(1): 20 Constellation grow
Slide 122: Selective M&A growth: GEO + MEO Synergies
Profitable execution of selective M&A growth: GEO + MEO - Synergies Consistent delivery of substantial synergies EUR 53 million in 2017 rising to EUR 106 million EUR million in 2021 106 Combinational and transformational synergies • Commercial 86 24 • Product Development 14 5 5 12 • Operational
Slide 123: Selective M&A growth: GEO + MEO Why now?
Profitable execution of selective M&A growth: GEO + MEO - Why now? Benefits / savings of accelerated execution(1) EUR million Cash Flow Impact in 2017 NPV ▲ Executing SES’s data-centric strategy Acceleration of Operational & c.10 15-20(2) and accelerate realisation of synergies Product Development S
Slide 124: Selective M&A growth: GEO + MEO EPS
Profitable execution of selective M&A growth: GEO + MEO - EPS EPS accretiveness in 2018 EUR per Share • Pro forma EPS for • Negative EBITDA in 2015 increase O3b ownership • EBITDA breakeven reached in May 2016 before getting control • Impact of unwinding accelerated D&A 1.34 1.29 (0.05) +0.11 (0.36)
Slide 125: Organic and selective M&A growth: CapEx
Profitable execution of organic and selective M&A growth: CapEx O3b’s CapEx profile for next eight satellites SES’s future consolidated CapEx profile EUR million Total 2016-2020: EUR 0.4 billion(1) Total 2016-2020: EUR 3.1 billion(1) 820 200 170 80(2) 680 120 20 110 565 150 60 535 510 110 130 90 60
Slide 126: Organic and selective M&A growth: Normalised CapEx
Profitable execution of organic and selective M&A growth: Normalised CapEx Normalised CapEx p.a. – SES + O3b in 2018 / 2022 EUR million 655 535 120 -100 555 ▲ Current scope Normalised 2018 CapEx 495 40 projected at EUR 535 million 595 ▲ O3b adds approximately EUR 120 million(1) 435 475 495 ▲ Target
Slide 127: Organic and selective M&A growth: Revenue
Profitable execution of organic and selective M&A growth: Revenue 2016 2017 2018 2019 2020 Video SES-9, SES-10, SES-12, SES-14, SES-15 EUR 250 - 300 (wide beam) million of potential annualised revenue by 2021(1) Enterprise (Up to 15% of SES FY SES-12, SES-14, SES-15 (HTS) 2015 revenue) O3b Networks
Slide 128: Optimising financing decisions and prudent use of cash: Framework
Optimising financing decisions and prudent use of cash: Framework Current / Target IRR hurdle rates(1) Over 10% for Infrastructure 1 (organic & inorganic) Over 15% for Services Over 82% for Infrastructure 2 EBITDA margins 14-18% for Services Long average maturity at around 8 years Averag
Slide 129: Focusing on shareholder value and returns
Focusing on shareholder value and returns Executing SES’s growth strategy within a disciplined and consistent financial framework • Delivering robust profitability and financial returns • Self-funding profitable organic growth • Profitable execution of selective M&A growth • Optimising financing d
Slide 130: 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