Telesat Corporation · NASDAQ:TSAT
Telesat — Investor Presentation (December 2021)
38 slides from Telesat's investor presentation, Dec 7, 2021
Slide 1: Investor Presentation December 2021
Investor Presentation December 2021
Slide 2: Disclosures
Disclosures 2 Note: unless otherwise stated, all values included are in Canadian dollars. This Presentation (together with the information contained herein and the materials accompanying it collectively, this “Prese nta tion”) constitutes confidential information and is provided to you on the condit
Slide 3: Disclosures: Forward-Looking Information
Disclosures 3 Forward - Looking Information This presentation may include "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27 A of the Securities Act of 1933 , as amended and Section 21 E of the Securities Exchange Act of 1934 , as a
Slide 4: Investment highlights
Investment highlights Pex
Slide 5: Investment highlights
Investment h ighlights Telesat (NASDAQ: TSAT) (TSX: TSAT) is a leading global satellite operator with an established , high cash flow generative business and compelling growth opportunities Revenue well - diversified across services and geographic regions with industry leading operating margins As o
Slide 6: Management team
Management team Strong track record of operational execution and value creation 6 Daniel Goldberg Chief Executive Officer & President 28 Years of Experience Andrew Browne Chief Financial Officer 36 Years of Experience Michèle Beck SVP, North American Sales Chris DiFrancesco VP, GC and Secretary Tom
Slide 7: Telesat is a leading global satellite operator
Telesat is a leading global satellite operator 7
Slide 8: Strong global position
Strong global position With highly strategic spectrum and orbital rights and young global fleet with high utilization 8 | Note: Metrics as of 9/30/2021. (1) Compared with disclosed utilization of Intelsat and Eutelsat. Telesat 80% fleet utilization 1 is best - in - class ~ 7 years average expected r
Slide 9: High quality, diversified revenue with blue chip customers
High q uality , diversified r evenue with blue chip customers 9 By Service Type By Region Consulting & Other 2% EMEA 6% Asia & Australia 5% LatAm & Caribbean 7% North America 82% Broadcast 51% Enterprise 47% Note: LTM Sep. 2021, Reflects Consolidated Telesat Canada revenues, inclusive of Unrestricte
Slide 10: High revenue visibility and predictability
High r evenue v isibility and p redictability 10 Revenue Backlog of $2.3B (9 - 30 - 21)/ 2.9x LTM Revenue Beginning of Year Backlog as % of Revenue ($ mm) 80% 83% 86% $ 722 $ 759 $ 706 $ 903 $ 911 $ 820 2018 2019 2020 Beginning of Year Revenue in Backlog Actual Revenue $ 168 $ 551 $ 448 $ 310 $ 218
Slide 11: Global demand for broadband is growing rapidly
Global demand for broadband is growing rapidly 11
Slide 12: Exponential growth in global broadband demand
95 137 174 219 255 301 360 416 560 716 838 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Exponential growth in global broadband demand IP traffic forecasted to continue to roughly double every three years 12 CAGR 24% (Exabyte per month) Source: Ericsson, 2021 Global data traffic
Slide 13: Low latency critical for quality broadband
Low latency critical for quality broadband 13 Cloud and 5G application performance degrades with higher latency VPN and secure encrypted links time out at high latency Interactive webpages and social media apps need low latency FCC stipulated low latency (100 ms) as key criterion for US$20.4B Rural
Slide 14: Key market verticals lack quality broadband
Key market verticals lack quality broadband 14 ▲ Cruise & Yacht: High quality broadband for passengers ; meet seasonal surge demands ▲ Energy and Merchant Ships: ship - to - shore operations ▲ Crew welfare ▲ Ships, aircraft (manned and unmanned) and ground vehicles and bases ▲ Low latency, global co
Slide 15: ~US$430 billion addressable market
~US$430 billion addressable market Growing Telesat’s TAM by 20x 15 | ~US$18B ~US$430B ~US$430B FSS TAM today LEO TAM 2025 1 Aviation Government Maritime Terrestrial Source: ITU, International Civil Aviation Organization, UNCTAD, NSR, International Defense Budgets, US Department of Defense Bud gets,
Slide 16: Telesat Lightspeed is designed to be the world's most advanced LEO network
Telesat Lightspeed is designed to be the world’s most advanced Low Earth Orbit satellite network 16
Slide 17: Telesat Lightspeed design guided by enterprise customers
Telesat Lightspeed Design guided by over 50 years of serving best - in - class enterprise customers worldwide 17 Telesat Lightspeed was designed to provide the most capable broadband solution to global enterprise customers in the most cost efficient way possible High Speed Gbps links Low Latency 30
Slide 18: Building the world's most advanced LEO satellite network
Telesat Lightspeed Building the world’s most advanced Low Earth Orbit satellite network 18 298 advanced satellites will operate in both polar and inclined orbits Designed for true global coverage with more concentrated capacity in high demand areas Expected to have more network capacity than all GEO
Slide 19: Enterprise customer-driven design, next generation technologies
Telesat Lightspeed Enterprise customer - driven design, leveraging next generation technologies 19 | MIT conducted a study of various LEO networks and concluded that “Telesat’s system performs significantly better than the competition” The only constellation that has all of the following key feature
Slide 20: Telesat Lightspeed to be manufactured by Thales Alenia Space
Telesat Lightspeed to be manufactured by Thales Alenia Space, The world’s leader in manufacturing and implementing cutting edge global satellite constellations Thales Alenia Space selected as the prime manufacturer and will be responsible for the end - to - end network performance and related specif
Slide 21: Strong market engagement and interest
Strong market engagement and interest Numerous technology demonstrations successfully completed with prospective customers 21 ▲ Application testing on Telesat LEO1 satellite ▲ Joint marketing to end users ▲ Joint hardware development ▲ Regulatory collaboration ▲ Ground infrastructure cooperation ▲ T
Slide 22: Strong Canadian government support
Telesat Lightspeed has received strong Canadian government support $1.44 B Gov. of Canada investment 1 Low cost, long dated (11.5 - 20 years), up to approximately 18% is forgivable subject to the satisfaction of certain conditions $0.6 B Gov. of Canada capacity commitment Take or pay agreement, $600
Slide 23: Tremendous growth opportunity
Telesat has a tremendous growth opportunity Driven by explosive global broadband demand 23 In year 5 of Telesat Lightspeed operations, Telesat expects annual Lightspeed revenue to approach 1% of the US$430 billion 1 TAM, with adjusted EBITDA margins in line with current performance 1. Excludes broad
Slide 24: Strongly positioned for success with Telesat Lightspeed
Telesat is strongly positioned for success with Telesat Lightspeed The only constellation designed from the ground up to serve the unique needs of enterprises 24 50+ years of innovation, industry firsts and engineering excellence Highest priority global spectrum rights Deep operational experience co
Slide 25: Financial highlights
Financial highlights TELESAT =
Slide 26: Financial highlights
Financial h ighlights 26 Metrics referenced are on an LTM basis as of 12/31/2020, unless otherwise stated. 1 Revenue backlog as at 9/30/2021. 2 Simple Free Cash Flow defined as Adj. EBITDA less Capex. Simple Free Cash Flow is a non - IFRS measure. Please refer to the Appen dix for a reconciliation t
Slide 27: Consistent and stable historical financial performance
Consistent and s table h istorical f inancial p erformance – h igh o perating m argins and s trong f ree c ash f low 27 Revenue Adj. EBITDA 1 Adj. EBITDA Margins Simple Free Cash Flow 2 3 1 Adjusted EBITDA is a non - IFRS measure. Please refer to the Appendix for a reconciliation of Adjusted EBITDA
Slide 28: Strong financial performance and value creation
28 8.3 3.6 2007 2021 Q3 LTM S trong f inancial p erformance and v alue c reation 28 $331 $618 2007 2021 Q3 LTM Adjusted EBITDA 58% Adjusted EBITDA Margin Note: 1. Actual numbers as filed; LTM as of 9/30/21 2. 2007 to 2009 figures are based upon Canadian Generally Accepted Accounting Principles while
Slide 29: Telesat Lightspeed sources of funds
Telesat Lightspeed sources of funds 29 Sources of funding $1.4B Telesat Investments and Cash Held for Telesat Lightspeed (to 6/30/21) Actual $1.44B Government of Canada Investment Term sheet in place 1 $0.4B Government of Quebec Investment Memorandum of Understanding in place 1 $0.4B U.S. C - Band I
Slide 30: Conclusion
Conclusion 30
Slide 31: Positioned for significant growth and value creation
Telesat is positioned for significant growth and value creation 31 One of the largest and most innovative satellite operators Existing high cash flow generative business underpinned by significant contractual backlog with blue chip customer base, industry - leading operating margins, and young fleet
Slide 32: Appendix
Appendix 32
Slide 33: Telesat Share Structure
Telesat Share Structure Description and Class Designation Listing (Ticker) Securities Outstanding Percent Ownership (combined basis) Class A Common Shares and Class B Variable Voting Shares of Telesat Corporation Nasdaq (TSAT) TSX (TSAT) 11,907,246 24% Class A and Class B Units of Telesat Partnershi
Slide 34: Telesat's current corporate structure
Telesat’s current corporate structure 34 Telesat Corporation Public Management Loral ~36% ~26% <1% ~37% Telesat Partnership Telesat Canada Telesat LEO Holdings Inc. Telesat LEO Inc. Telesat CanHoldco ~63% Voting Trust Golden Share 100% 100% ~37%
Slide 35: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 35 Note: All figures in thousands of Canadian dollars. FY2018 FY2019 FY2020 Revenue 902,932 910,893 820,468 Net (loss) income (90,936) 187,198 245,578 Tax expense (recovery) 61,056 15,122 (4,353) Loss (gain) loss on changes in fair value of financial instruments 18,205
Slide 36: Adjusted EBITDA Reconciliation 2007
Adjusted EBITDA Reconciliation 2007 36 Note: All figures in thousands of Canadian dollars. Values are based upon Canadian Generally Accepted Accounting Principles Successor Entity Predecessor Entity Combined year ended December 31, 2007 For the period October 31 to December 31, 2007 For the period J
Slide 37: Simple Free Cash Flow Reconciliation
Simple Free Cash Flow Reconciliation 37 Note: All figures in thousands of Canadian dollars. FY2018 FY2019 FY2020 Adjusted EBITDA $751,894 $762,689 $653,355 (-) Satellite programs (67,387) (3,668) (75,902) (-) Purchase of property and other equipment (15,997) (8,345) (17,060) (-) Purchase of intangib
Slide 38: Investor contacts
Hugh Harley +1 613 748 8424 Michael Bolitho +1 613 748 8828 www.Telesat.com vimeo.com/telesat Investor contacts: IR@Telesat.com