Inmarsat — FY2008 Earnings Presentation
29 slides from Inmarsat's earnings presentation, Mar 12, 2009
Slide 1: Inmarsat plc Q4 & Full year results 2008
Inmarsat plc Q4 & Full year results 2008 March 12th 2009 The mobile satellite company TM
Slide 2: Forward-looking statements
Forward-looking statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual result
Slide 3: Full year results 2008
Full year results 2008 Andrew Sukawaty Chairman & Chief Executive Officer The mobile satellite company TM
Slide 4: 2008 financial highlights
2008 financial highlights Total revenue $996.7m (2007: $576.5m) (1) • Inmarsat Core revenue up 13.9% to $634.7m (2007: $557.2m) EBITDA $531.2m (2007: $388.1m) (1) • Inmarsat Core EBITDA up 12.5% to $431.6m (2007: $383.5m) Profit before tax $193.8m (2007: $124.7m) Adjusted EPS 30 cents (2007: 21 cent
Slide 5: Inmarsat Core – MSS revenue
Inmarsat Core – MSS revenue (1) US$m +13.1% 700 $618.4 600 $546.6 Leasing +20% 80 66 64 500 Aero +45% 44 400 Land +13% 142 126 300 200 310 Maritime +7% 333 100 0 FY 2007 FY 2008 (1) Inmarsat plc and its subsidiaries excluding CIP 5
Slide 6: Inmarsat Core – EBITDA
Inmarsat Core – EBITDA (1) US$m 500 +12.5% 450 $431.6 400 $383.5 350 300 250 200 150 100 50 0 FY 2007 FY 2008 (1) Inmarsat plc and its subsidiaries excluding CIP 6
Slide 7: Dividends
Dividends 30.33 cents US$ cents 28.88 cents +5.0% 20 18.20 18 17.33 16 14 11.55 12.13 12 10 8 6 4 2 Interim Final Interim Final 0 FY 2007 FY 2008 7
Slide 8: Satellite fleet update
Satellite fleet update Third Inmarsat-4 satellite successfully launched in August Entered commercial service in January at 98W Repositioning of satellites completed successfully Global broadband coverage in place Alphasat construction underway and on schedule 8
Slide 9: Management update
Management update Perry Melton appointed Chief Operating Officer 1 January 2009 16 years experience at Inmarsat Previously VP of Sales and Marketing 9
Slide 10: Q4 & Full year results 2008
Q4 & Full year results 2008 Rick Medlock Chief Financial Officer The mobile satellite company TM
Slide 11: Inmarsat plc – Consolidation analysis
Inmarsat plc – Consolidation analysis Inmarsat Adjust- Inmarsat Core CIP ments plc US$m 2008 2008 2008 Revenue 634.7 638.0 (276.0) 996.7 Operating costs (203.1) (539.7) 277.3 (465.5) EBITDA 431.6 98.3 1.3 531.2 Depreciation & amortisation (167.0) (47.7) - (214.7) Share of results of associates - 0.7
Slide 12: Inmarsat Core - 2008 full year results
Inmarsat Core - 2008 full year results (1) Financial year US$m 2008 2007 Revenue 634.7 557.2 13.9% Operating costs (203.1) (173.7) (16.9%) EBITDA 431.6 383.5 12.5% Depreciation & amortisation (167.0) (174.2) Operating profit 264.6 209.3 26.4% Net interest payable (78.2) (83.8) Profit before tax 186.
Slide 13: Inmarsat Core - 2008 cash flow
Inmarsat Core - 2008 cash flow (1) Financial year US$m 2008 2007 EBITDA 431.6 383.5 Working capital/non-cash items (7.0) (10.8) Operating cash flow 424.6 372.7 Capital expenditure (187.7) (209.9) Capitalised operating costs (23.4) (17.5) Cash interest (37.0) (33.5) Cash tax (1.3) 0.1 Free cash flow
Slide 14: Inmarsat Core - Net debt
Inmarsat Core - Net debt (1) (2) US$m Leverage 1,300 $1,201 2.8x $211m of liquidity Convertible $248 through cash and 1,100 Bond 2017 undrawn bank facilities 900 No debt maturities in Discount $450 Notes 2009 700 2012 • $50m amortisation ` Senior 500 Notes CIP/Stratos net debt at $164 31 December 20
Slide 15: Inmarsat Core – Financial summary
Inmarsat Core – Financial summary (1) Revenue growth ahead of plan in 2008 9 Operating cash flow growth up 14% 9 Pre-tax profit growth up 49% 9 Significant capex reductions in 2009 9 Modest debt and deleveraging ahead 9 Ample covenant headroom in borrowing facility 9 (1) Inmarsat plc and its subsidi
Slide 16: Holdings Ltd - Q4 MSS revenue
Inmarsat Holdings Ltd - Q4 MSS revenue US$m 180 +20% $157.2 160 21.2 140 $130.5 Leasing +44% 18.2 14.7 120 Aero +53% 11.9 100 34.9 28.4 Land +23% 80 60 40 Maritime +10% 82.9 75.5 20 0 Q4 2007 Q4 2008 16
Slide 17: Maritime sector
Maritime sector US$m ¾ Voice up 3% 60 56.6 49.9 ¾ Data up 13% 50 ¾ Active terminals up 6% 40 ¾ ARPU up 30 25.6 26.3 20 Revenue and terminal sales 10 momentum sustained in Q4 0 Sequential growth in average Q4 2007 Q4 2008 Fleet traffic from Q3 to Q4 Voice Data 17
Slide 18: Land mobile sector
Land mobile sector ¾ Data up 30% US$m 35 ¾ Voice down $0.9m 32.3 30 ¾ Active terminals up 2% 24.9 25 20 BGAN key to land sector growth 15 • Revenue up 78% 10 • Subscribers up 75% 5 3.5 2.6 • Sustained ARPU 0 R-BGAN discontinued at end of Q4 2007 Q4 2008 year in line with plan Voice Data 18
Slide 19: Aeronautical & Leasing
Aeronautical & Leasing US$m ¾ Aero revenue up 25 53% 21.2 20 18.2 ¾ Active aero terminals up 13% 14.7 15 11.9 ¾ Leasing up 44% 10 Sustained demand for Swift 64 service 5 In-flight GSM service trials underway 0 Q4 2007 Q4 2008 Success in new lease business and high renewals rate Aero Leasing 19
Slide 20: Holdings Ltd - Q4 operating costs
Inmarsat Holdings Ltd - Q4 operating costs US$m 70 $59.2 60 $48.0 23.7 50 40 26.3 11.0 30 8.7 20 31.2 10 18.8 0 -5.8 -6.7 -10 -20 Q4 2007 Q4 2008 Own work capitalised Other operating costs Network & satellite operations Employee benefit costs 20
Slide 21: Strategy update and outlook
Strategy update and outlook Andrew Sukawaty Chairman & Chief Executive Officer The mobile satellite company TM
Slide 22: 2009 priorities
2009 priorities Continue core business growth and cost control Build broadband services momentum through global coverage Exercise call option to complete Stratos transaction Transition successfully to new distribution agreement Refocus on global satellite phone voice service Progress business opport
Slide 23: Stratos Global
Stratos Global All regulatory approvals received, no restrictions Expect to exercise call option from 15 April No funding or refinancing requirements on exercise Already fully consolidated into Inmarsat accounts Operational plan – stand alone operating division • Motivated management team • Limited
Slide 24: Distribution agreement update
Distribution agreement update Discussions on terms concluded Begin trading on new terms 15 April Commitment to fair channel management Volume discount and other changes to be phased in • Revised volume discounts terms over two years • Revised payment terms over three years 24
Slide 25: Global Satellite Phone Services
Global Satellite Phone Services Schedule impacted by third satellite launch delay and vendor change Original design and functionality objectives still achievable Global service launch reforecast to Q2 2010 Resource increased to ensure successful launch and capture revenue objectives Retain 10% marke
Slide 26: Aero passenger connectivity
Aero passenger connectivity Commercial roll-outs and demand for trials building 9 AirAsia 9 Oman Air • Emirates 31 planes equipped 9 Airblue 9 Ryanair • Ryanair 20 planes equipped 9 Royal 9 Air France Jordanian 100,000 users on Emirates in first 11 months, February run 9 BMI 9 Saudi Arabian rate 25,
Slide 27: Inmarsat Core – 2009 outlook
Inmarsat Core – 2009 outlook (1) Positive operating trends maintained through Q4 and early trading data for 2009 positive No evidence that overall Maritime revenues impacted by global economic slowdown in first two months High proportion of government business and high dependence among commercial an
Slide 28: Inmarsat Core - Summary
Inmarsat Core - Summary (1) 2008 revenue growth 13.9% 9 2008 EBITDA growth 12.5% 9 Dividend increased 9 Defensive qualities 9 Positive outlook 9 (1) Inmarsat plc and its subsidiaries excluding CIP 28
Slide 29: Questions & Answers
Questions & Answers Inmarsat plc Q4 & Full year results 2008 12 March 2009 www.inmarsat.com The mobile satellite company TM