Telesat Corporation · NASDAQ:TSAT
Telesat — Investor Presentation (November 2023)
31 slides from Telesat's investor presentation, Nov 9, 2023
Slide 1: Investor Presentation November 2023
Investor Presentation November 2023
Slide 2: Disclosures
Disclosures 2 Note: unless otherwise stated, all values included are in Canadian dollars. This Presentation provided to you on the condition that you agree that you will not reproduce, forward or distribute it in whole or in part to any third party without the prior written consent of Telesat Corpor
Slide 3: Disclosures: Forward-looking Statements
Disclosures 3 Forward - looking Statements This Presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, a
Slide 4: Telesat is a leading global satellite operator with high cash flow and growth opportunities
Telesat (NASDAQ & TSX: TSAT) is a leading global satellite operator with an established, high cash flow generative business and compelling growth opportunities backed by deep commercial, technical and regulatory expertise 4 Leading global satellite operator with diversified revenue and long - term v
Slide 5: Revenue supported by blue chip customers and diversified by application and region
Revenue supported by blue chip customers and diversified by application and region 5 Percentages are based on LTM as of September 30, 2023 By Service Type By Region Consulting & Other 2% Asia & Australia 7% EM E A 5% LatAm & C ar i b b e an 7% North America 81% Broadcast 46% Enterprise 52% Consultin
Slide 6: Demand for broadband continues to increase dramatically with users requiring low latency
Demand for broadband continues to increase dramatically with users requiring low latency connectivity 6 Cloud and 5G application performance degrades with higher latency VPN and secure encrypted links can time out over high latency links Interactive webpages and social media apps demand low latency
Slide 7: Telesat Lightspeed will initially focus on the ~US$320B Enterprise market
Telesat Lightspeed will initially focus on the ~US$320B Enterprise market covering terrestrial enterprise, aviation, maritime and government verticals Telesat estimates Total Addressable Market (TAM) for LEO services in 2032 to be ~US$650B 7 | Source: ITU, International Civil Aviation Organization,
Slide 8: Guiding design principles of Telesat Lightspeed
Guiding design principles Telesat Lightspeed is optimized for enterprise and government users and highly capital efficient 8 High Speed & High Capacity Gbps links Low Latency 30 to 50 msec Fully Global Anywhere, Anytime Reliable, Resilient and Secure Distributed, resilient and interference resistant
Slide 9: Lightspeed enterprise class service empowered by advanced digital technologies
Telesat Lightspeed’s enterprise class service empowered by highly advanced, state - of - the - art digital technologies 9 Digital Processor on - board each satellite supports high efficiency satellite links with full routing capability to deliver secure and dynamic global connectivity Optical Inter
Slide 10: Telesat Lightspeed timeline
Telesat Lightspeed timeline 10 Te chno l ogy demo on LEO 3 Network Emula t o r 2023 Launches begin Field Trials Q2 2026 Global service begins Q4 2027 156 satellites in orbit Q1 2028 198 satellites in orbit Q4 2030
Slide 11: Lightspeed delivers enterprise-class service to key market verticals
Enterprise/Terrestrial US$292B TAM 2032 Maritime US$5B TAM 2032 Aviation US$17B TAM 2032 Government US$6B TAM 2032 Telesat Lightspeed delivers enterprise - class service to key market verticals that lack high - performing broadband 11 2032 Telesat rev. estimate: ~US$1.4B (~.5% of TAM) 2032 Telesat r
Slide 12: Governments of Canada, Ontario and Quebec strongly support Telesat Lightspeed
Governments of Canada, Ontario and Quebec strongly support Telesat L i ghtspe e d : ~ U S$2 . 6 B i l l i o n in ag greg ate f u nd i n g 1 12 1 Government financing commitments are subject to a number of conditions, including the conclusion of definitive agreements. “ As a global leader in the new
Slide 13: Telesat anticipates strong revenue growth driven by fast-growing demand
Telesat anticipates strong revenue growth driven by fast - growing demand and compelling enterprise - grade service value proposition 13 US$M $3,200 Telesat expects to capture ~1% of 20 3 2 US $ 320 bi l l i on E nterp rise T A M with EBITDA margin in line $600 with its historic GEO performance 2032
Slide 14: Financial Overview
Financial Overview TELESAT n
Slide 15: Financial Highlights
Financial Highlights 15 1 Revenue backlog as at 9/30/2023. 2 Adjusted EBITDA margin and Free Cash Flow as of FY 2022 (excluding Lightspeed CAPEX) are non - IFRS measures. Please refer to the Appendix for a reconciliation of Free Cash Flow and Adjusted EBITDA margin to Net Income. 3 Government financ
Slide 16: Consistent and stable historical financial performance
Consistent and stable historical financial performance – high operating margins and strong free cash flow 16 R e v en u e Adj. EBITDA 1 Adj. EBITDA Margins Free Cash Flow 2 86% 85% 77% Beginning of Year Backlog as % of Revenue $ 637 $ 595 $ 563 2020 2021 1 Adjusted EBITDA and Adjusted EBITDA margin
Slide 17: Recent Performance – Q3 YTD 2023 Update
Recent Performance – Q3 YTD 2023 Update 17 1 Adjusted EBITDA and Adjusted EBITDA margin are non - IFRS measures. Please refer to the Appendix for a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to net income. ⯅ Generated total revenues of C$538.3 million - YTD decrease in revenues of
Slide 18: Strong financial performance and value creation
8.3 2.8 2007 2023 Q3 LTM LTM as of September 30, 2023 2007 to 2009 figures are based upon Canadian Generally Accepted Accounting Principles while 2010 onwards is IFRS Net debt is defined as gross short and long - term indebtedness less cash and short - term investments; 2007 excludes Senior Preferre
Slide 19: Sources and Uses Lightspeed Program
$2.7B Uses Constellation Investment (US$) Launch and Development of Initial 156 Satellites $1.6B Sources of Funding (US$) Telesat Equity $0.8B $0.4B ~$3.9B Operational expenditures Contingency Total Investment for 156 Satellite Constellation $2.1B $0.3B ~$3.9B Government Funding 1 Vendor Financing L
Slide 20: Telesat Lightspeed Outlook Revenue and EBITDA
Telesat Lightspeed Outlook Revenue and EBITDA Telesat Lightspeed Revenue 1 Telesat Lightspeed EBITDA Margin expected to be approximately in line with historical levels by 2029 1 As discussed on slide 13 $600 $3,200 2028 2029 2030 2031 2032 US$M $400 20 $2,700 2028 2029 2030 2031 2032 US$M
Slide 21: Telesat Lightspeed CAPEX
Telesat Lightspeed CAPEX 1 US$M Total Capex for 198 satellites US$3.5B Total Capex Program (2023 - 2030) 1 Note 156 satellites in service scheduled early 2028 42 satellites in service scheduled end of 2030 See slide 10 156 Satellites 21 Add’l 42 Sats 198 Satellites US$1,987M 425M 1,562M Satellite Co
Slide 22: Conclusion
Conclusion 22
Slide 23: Telesat is strongly positioned to execute its growth plan and create shareholder value
Telesat is strongly positioned to execute its growth plan and create significant shareholder value 23 50+ years of innovation, industry firsts, engineering excellence and world class customer service Longstanding and trusted provider of mission - critical, enterprise - grade communications services
Slide 24: Appendix
Appendix 24
Slide 25: Environmental, Social and Governance
Environmental 1. Responsible use of space • 50+ years of experience • Advanced features to mitigate space traffic and limit debris • Minimized carbon footprint through low number of satellites and launches 2. Enabling net zero emissions • High - speed, ubiquitous broadband key for clean tech and red
Slide 26: LTM September 2023 Revenue and Adjusted EBITDA Reconciliation
LTM September 2023 Revenue and Adjusted EBITDA Reconciliation 26 Note: All figures in thousands of Canadian dollars. Amount in '000 CAD LTM September 30, 2023 YTD Q3 2023 Q4 2022 637,638 545,298 92,340 Net income (loss) 100,238 98,452 1,786 Tax expense (recovery) (72,432) (181) (72,251) (Gain) loss
Slide 27: Adjusted EBITDA YTD Q3 2023 reconciliation
Adjusted EBITDA YTD Q3 2023 reconciliation 27 Note: All figures in thousands of Canadian dollars. YTD Q3 YTD Q3 2023 2022 $ 545,298 $ (172,457) Net income (loss) 98,452 48,143 Tax expense (recovery) - (4,314) (Gain) loss on changes in fair value of financial instruments (181) (48,764) 311,842 (10,56
Slide 28: Adjusted EBITDA Reconciliation 2007
Adjusted EBITDA Reconciliation 2007 28 Note: All figures in thousands of Canadian dollars. Values are based upon Canadian Generally Accepted Accounting Principles Combined year ended December 31, 2007 $ 569,203 Operating revenues $ 77,691 Net (loss) earnings (5,093) Income tax (recovery) expense 1,4
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 29 Note: All figures in thousands of Canadian dollars. FY2022 FY2021 FY2020 $ 759,169 $ 758,212 $ 820,468 Revenue $ (80,117) $ 155,025 $ 244,820 Net (loss) income 49,929 78,377 (4,353) Tax expense (recovery) (4,314) 18,684 13,115 Loss (gain) loss on changes in fair val
Slide 30: Free Cash Flow Reconciliation (excluding Lightspeed capex)
Free Cash Flow Reconciliation (excluding Lightspeed capex) 30 Note: All figures in thousands of Canadian dollars.
Slide 31: Investor contacts
www.Telesat.com vimeo.com/telesat Investor contacts: Hugh Harley +1 613 748 8424 Michael Bolitho +1 613 748 8828 IR@Telesat.com