SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — H1 2018 Earnings Presentation
30 slides from SES SA FDR (Class A)'s earnings presentation, Jul 27, 2018
Slide 1: Half Year 2018 Results
Half Year 2018 Results Six months ended 30 June 2018 27 July 2018 Betzdorf, Luxembourg Half Year 2018 Results |
Slide 2: Agenda
Agenda Steve Collar Business Highlights President & CEO Ferdinand Kayser SES Video CEO of SES Video John-Paul Hemingway SES Networks CEO of SES Networks Andrew Browne Financial Review CFO Half Year 2018 Results | 1
Slide 3: Business Highlights
BUSINESS HIGHLIGHTS Steve Collar, President & CEO 2
Slide 4: Highlights
Highlights Strong Half Year results, fully in line with our expectations Revenue of EUR 981.4 million, with underlying revenue up 1.5%(1) Double-digit underlying growth in Networks with important new business secured across all verticals Important renewals in core video neighbourhoods, plus
Slide 5: Completed Internal Review of Financial Outlook
Completed Internal Review of Financial Outlook As committed at Q1 2018 results, completed review of the outlook On track to be within the top half of our 2018 revenue outlook of EUR 1,990 - 2,035 million • SES Video expected to deliver revenue of EUR 1,320 - 1,335 million • SES Networks deliveri
Slide 6: Growing Revenue and EBITDA Through Expansion of SES Networks
Growing Revenue and EBITDA Through Expansion of SES Networks Revenue and EBITDA margin(1) EUR million 2,110 – 2,210 2,011 >40% of revenue 32% of revenue | Networks ▲ Strong growth engine for the SES business ▲ Satellite becoming more mainstream in data networks | Video ▲ Large, profitable and stable
Slide 7: Our Strategic Priorities
Our Strategic Priorities | Video Develop and reinforce our core video neighbourhoods Develop differentiated global value-added services capabilities MOVING IMAGES THAT Build hybrid satellite and terrestrial network capabilities MOVE THE WORLD | Networks Optimising services across our unique
Slide 8: SES Video
SES VIDEO Ferdinand Kayser, CEO of SES Video 7
Slide 9: Strong Fundamentals Underpin Resilient, Profitable Neighbourhoods
SES | Video Strong Fundamentals Underpin Resilient, Profitable Neighbourhoods SES Video revenue EUR million Nearly 95% of 2018 expected revenue 671.9 658.5 now secured (Q4 2017: over 85%) Underlying -2.3% 7,941 total TV channels; +3% (YOY) 665.5 650.0 2,765 HDTV channels; +7% (YOY) H1 2017 at H1 201
Slide 10: Supporting Clients With Quality Experience and Differentiated Services
SES | Video Supporting Clients With Quality Experience and Differentiated Services Delivering FIFA World viewers enjoying IPBC used 4K Cup in UHD to Formula 1TM in UHD on HDR playout solution for audiences of Canal RTL live World Cup matches Digitaal Important contract Expanding reach for MX1 and Ub
Slide 11: Video Distribution – Prime European Neighbourhoods Remain Resilient
SES | Video Video Distribution – Prime European Neighbourhoods Remain Resilient Video Distribution revenue walk EUR million +2.0 ▲ Underlying revenue -4.2% (YOY) 514.8 (21.3) 495.5 • Europe stable with long-term renewals signed at like-for-like pricing Underlying -4.2% • North America lower due to v
Slide 12: Video Services – MX1 Stability Complementing HD+ Growth
SES | Video Video Services – MX1 Stability Complementing HD+ Growth Video Services revenue walk EUR million ▲ Underlying revenue +3.7% (YOY) +5.8 n/a • Increase in HD+ annual fee (at start of 163.0 157.2 Q2 2017) driving growth and supporting Underlying +3.7% expansion of customer offering • MX1 sta
Slide 13: SES Networks
SES NETWORKS John-Paul Hemingway, CEO of SES Networks 12
Slide 14: Differentiated Services Driving Double-digit Underlying Growth
SES | Networks Differentiated Services Driving Double-digit Underlying Growth SES Networks revenue EUR million Over 90% of 2018 expected revenue 322.2 310.0 now secured (Q4 2017: over 75%) 311.4 281.6 Underlying +10.6% 4 launches successfully executed in H1 completing 2018 schedule High double-digit
Slide 15: Continuing to Build Commercial Momentum
SES | Networks Continuing to Build Commercial Momentum Cellular backhaul Providing the Expanding low-latency services to leading industry’s most- connectivity solutions mobile network advanced connectivity to oil rigs operators in Pakistan solution to mega-ships Expanding use of MEO Blanket Purchase
Slide 16: Government – U.S. and Global Government Gaining Momentum
SES | Networks Government – U.S. and Global Government Gaining Momentum Government revenue walk EUR million +18.2 +2.9 ▲ Underlying revenue +17.4% (YOY) 131.0 • Significant incremental adoption of MEO by U.S. DoD driving growth 109.9 Underlying +17.4% • Strong growth in Global Government, notably in
Slide 17: Fixed Data – Telcos and MNOs Expanding Managed Services
SES | Networks Fixed Data – Telcos and MNOs Expanding Managed Services Fixed Data revenue walk EUR million ▲ Underlying revenue -5.6% (YOY) 125.8 (6.6) • Lower wholesale capacity revenue, (5.2) 114.0 notably in EMEA Underlying -5.6% ▲ Growing managed services with Telcos and MNOs, notably in Latin A
Slide 18: Mobility – Strong Underlying Growth in Aero with Progress in Maritime
SES | Networks Mobility – Strong Underlying Growth in Aero with Progress in Maritime Mobility revenue walk EUR million +18.2 ▲ Comparison with 2017 affected by periodic revenue in H1 2017 from sale of transponders to GEE (15.3) 77.2 74.3 Underlying +30.9% ▲ Underlying revenue +30.9% (YOY) • Strong g
Slide 19: Financial Review
FINANCIAL REVIEW Andrew Browne, CFO 18
Slide 20: Financial Overview (1/2)
Financial Overview (1/2) Revenue of EUR 981.4 million including 1.5% growth in underlying revenue compared with H1 2017 • Total revenue down 6.4% as reported and down 0.5% at constant FX reflecting higher periodic and other revenue in H1 2017 • IFRS 15 implementation now expected to have no impact
Slide 21: Financial Overview (2/2)
Financial Overview (2/2) Net debt to EBITDA of 3.53x (H1 2017: 3.24x) is expected to be below 3.30x at end-2018 • H1 2018 ratio reflects effect of higher proportion of CapEx, interest and dividend payments in H1 2018 on lower 12-month rolling EBITDA Reaffirming revenue and EBITDA outlook for 201
Slide 22: Positive Underlying Revenue Growth
Positive Underlying Revenue Growth Revenue walk EUR million +14.4 1,048.7 (62.0) 986.7 (19.7) 981.4 H1 2017 Change in FX H1 2017 at Change in Change in H1 2018 as reported constant FX underlying periodic and other Underlying revenue up EUR 14.4 million (or 1.5%) at constant FX compared H1 2017 T
Slide 23: EBITDA Development Reflecting Expansion of SES Networks
EBITDA Development Reflecting Expansion of SES Networks EBITDA walk EUR million 687.1 (37.6) 649.5 (5.3) (14.7) (8.4) 621.1 EBITDA EBITDA EBITDA margin margin Margin 65.5% 65.8% 63.3% H1 2017 Change in FX H1 2017 at Revenue Operating Restructuring H1 2018 as reported constant FX expenses charge SE
Slide 24: Net Profit of EUR 227.7 million (H1 2017: EUR 275.5 million)
Net Profit of EUR 227.7 million (H1 2017: EUR 275.5 million) EUR million H1 2018 H1 2017 EBITDA 621.1 687.1 Depreciation, impairment and amortisation EUR 12.1 million lower (constant FX) than H1 2017 which (343.4) (381.1) expense included EUR 38.4 million impairment charge for AMC-9 Operating profit
Slide 25: Free Cash Flow Before Financing Activities up 16.9%
Free Cash Flow Before Financing Activities up 16.9% Free cash flow (FCF) before financing activities EUR million 439 375 280 45% 36% 29% H1 2016 H1 2017 H1 2018 Free Cash Flow (FCF) before financing activities FCF as a % of group revenue Increase in net operating cash flow of 8.3% and lower invest
Slide 26: Investing in Future Growth; CapEx Remains Unchanged
Investing in Future Growth; CapEx Remains Unchanged GEO-MEO Capital Expenditure (growth and replacement)(1) EUR million 1,130 (2) 180 100 550 492 460 430 380 83 80 850 90 310 90 110 100 409 100 100 290 240 170 140 FY '17 FY '18 FY '19 FY '20 FY '21 FY '22 Committed satellite Ground/non-satellite Est
Slide 27: First Half 2018 Leverage Development
First Half 2018 Leverage Development Net debt to EBITDA Times(1) 3.53 3.27 3.09 2.77 2.54 2014 2015 2016 2017 H1 2018 Net debt to EBITDA increase reflects lower 12-month rolling EBITDA and higher proportion of CapEx, interest and dividend payment in H1 2018; net debt to EBITDA expected to be below
Slide 28: Financial Outlook
Financial Outlook FY 2018(1) FY 2020 SES Video revenue EUR 1,320 - 1,335 million(1) EUR 1,250 - 1,300 million (from over EUR 1,350 million) SES Networks revenue EUR 660 - 690 million EUR 850 - 900 million (from over EUR 875 million) Other revenue Approximately EUR 10 million Approximately EUR 10 mil
Slide 29: 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 30: Investor Relations Contact
Richard Whiteing Investor Relations richard.whiteing@ses.com T +352 710 725 261 M +352 691 898 956 Connect with us 29