Eutelsat Communications Sa · EURONEXT:ETL

Eutelsat Communications Sa — H1 2021-22 Earnings Presentation

32 slides from Eutelsat Communications Sa's earnings presentation, Feb 17, 2022

  1. Slide 1: First Half 2021-22 Revenues

    FIRST HALF 2021-22 REVENUES 17 February 2022

  2. Slide 2: Appointment of Eva Berneke as CEO

    APPOINTMENT OF EVA BERNEKE AS CEO  Considerable experience across the TMT industry  Former CEO of KMD, leading Danish player in software and IT • Transformation of a declining business into a growth company • Development of new businesses and management of the slowdown of heritage business  Stron

  3. Slide 3: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 3

  4. Slide 4: Highlights

    HIGHLIGHTS • H1 Operating verticals down -4.2%, broadly in line with expectations and within the range of objectives for the Full Year Industry-leading profitability despite revenue decline H1 Adjusted Discretionary Free Cash-Flow well on track to reach full year objective $125m proceeds related to

  5. Slide 5: Key Financial Data

    KEY FINANCIAL DATA YoY Change First Half 2021-22 Reported Like-for-like Total Revenues €572m -9.0% -4.7%1 Operating Verticals Revenues €569m -7.2% -4.2%1 EBITDA margin at constant currency2 76.4% -0.6 pts Cash Capex2 (€98)m +€19m Reported Discretionary Free Cash-Flow2 €195m -€62m Adjusted Discretion

  6. Slide 6: Progress in Fixed Broadband Rollout

    PROGRESS IN FIXED BROADBAND ROLLOUT EUROPE: GO-TO-MARKET LARGELY DE-RISKED AFRICA: PROGRESSING ON MULTIPLE CHANNELS  Four of the five most populous European markets are now covered by wholesale or distribution agreements Telecom • Nigeria: Globacom Operators • Tanzania: Vodacom Service • Agreement

  7. Slide 7: EUTELSAT QUANTUM Starting Operations

    EUTELSAT QUANTUM STARTING OPERATIONS In service since mid-November • Bringing unprecedented flexibility • First contracts secured for two beams • Coverage, spectrum, power and • 1 beam for Maritime Mobility capacity in orbit-reconfiguration • 1 beam for Government Services • Real-time adaptation to

  8. Slide 8: Investment in OneWeb Closed

    INVESTMENT IN ONEWEB CLOSED Strong commercial and operational momentum ➢ Both tranches of investment closed ➢ $580m cash-out in H1 with remaining $135m to be called in upcoming quarters ➢ Eutelsat now second shareholder with a 23% stake1 ➢ Gen-1 slightly overfunded ➢ 13 launches completed with 2/3 o

  9. Slide 9: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 9

  10. Slide 10: H1 2021-22 Revenues

    H1 2021-22 REVENUES  Total revenues of €572m, down 9.0% H1 YoY revenue bridge (€m)  No material currency effect • Stable €/$ rate YoY at 1.17 -4.2%  Negative perimeter effect +0 • Acquisition of BBB on 1 October 2020 (20) • Disposal of EBI on 30 April 2021 (12) (25)  Negative swing of €12m in ‘O

  11. Slide 11: H1 FY 2021-22 Revenues by Application

    H1 FY 2021-22 REVENUES BY APPLICATION REVENUE REVENUES LIKE-FOR-LIKE2 CONTRIBUTION1 (€m) YOY CHANGE BROADCAST 62% 351 -7.5% DATA & 14% PROFESSIONAL 78 -4.1% VIDEO GOVERNMENT 13% SERVICES 74 -3.8% FIXED BROADBAND 5% 30 +37.3% MOBILE CONNECTIVITY 6% 37 +9.8% TOTAL OPERATING VERTICALS 569 -4.2% OTHER R

  12. Slide 12: Broadcast

    BROADCAST 62%  H1 revenues of €351m, down 7.5% YoY like-for-like1 379 785 351 • Lower revenues in Europe reflecting particularly the carry-forward effect of the slowdown in pace of new business last year • Temporary headwind of the partial renewal of capacity with Nilesat at 7/8°W • Negative impact

  13. Slide 13: Data & Professional Video

    DATA & PROFESSIONAL VIDEO 14%  H1 revenues of €78m, down 4.1% YoY like- for-like1 81 78 • Q2 revenues down -6.7% YoY and up +1.4% QoQ  Improved volume trend in Fixed Data: • Offsetting most of the negative impact of competitive pressure Q2 42 39 Q2  High-single digit decline in Professional Video

  14. Slide 14: Government Services

    GOVERNMENT SERVICES 13% 77 74  H1 revenues of €74m, down 3.8% YoY like-for- 161 like1 • Negative carry-forward effect of USG renewals in particular Fall 2021 campaign (75% renewal rate) affected by Q2 39 37 Q2 geopolitical context in MENA • Partly offset by new business  Q2 revenues down 5.9% YoY

  15. Slide 15: Fixed Broadband

    FIXED BROADBAND 5%  H1 revenues of €30m, up 37.3% like-for-like1 • Contribution of wholesale agreements: Orange, TIM and Hispasat • Growth of African operations 42 77  Q2 revenues up 24.7% YoY; up 5.9% QoQ1 30  Material progress in roll out Q2 22 25 • Distribution agreement with Deutsche Telekom

  16. Slide 16: Mobile Connectivity

    MOBILE CONNECTIVITY 6%  H1 revenues of €37m, up 9.8% YoY like-for-like1 • Contribution of Anuvu contract 34 79 37 • Sound performance of Maritime mobility • Ramp-up of contracts secured in previous years • Agreement for one beam on ETL QUANTUM Q2 16 19 Q2  Q2 revenues up 19.6% YoY and 11.0% QoQ 1

  17. Slide 17: Backlog & Fill Rate

    BACKLOG & FILL RATE BACKLOG (€BN) OPERATIONAL & UTILIZED TRANSPONDERS Fill rate 70.1% 71.2% 70.6% 4.4 4.4 4.2 1,380 1,377 1,380 967 981 974 Operational Transponders Ow Utilized Broadcast 67% 64% 64% Transponders 31 Dec. 2020 30 June 2021 31 Dec. 2021 31 Dec. 2020 30 June 2021 31 Dec. 2021 • Natural

  18. Slide 18: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 18

  19. Slide 19: Profitability

    PROFITABILITY EBITDA (€m)  H1 EBITDA margin of 76.4% at constant currency1 down 0.6 points YoY • Lower revenues 484 436  Lower Opex Margin at • Positive effect of changes in perimeter constant 77.0% 76.4% currency • Lower Bad Debt 77.4 77.4 77.5 • Continued strict cost discipline in the legacy bus

  20. Slide 20: Net Income

    NET INCOME Extracts from the H1 H1 consolidated income CHANGE statement in €m1 2020-21 2021-22 Revenues 629 572 -9.0% EBITDA2 484 436 -10.0% ► Lower D&A reflecting notably KA-SAT disposal and end Operating of depreciation period of certain assets income 216 276 +27.8% ► Other operating income includ

  21. Slide 21: Adjusted Discretionary Free Cash-Flow

    ADJUSTED DISCRETIONARY FREE CASH-FLOW In €m 203 (98) 8 FX, Hedging & one-offs related to LEAP 2 and to HQ move 363 (70) 1 (1) 195 Net Cash-Flow from Cash Capex (1) Interest and Other fees paid Discretionary Free Cash-Flow operations net of interests received Change as per financial objectives -62 Re

  22. Slide 22: Net Debt Evolution

    NET DEBT EVOLUTION In €m (109) 14 495 (195) 222 2,994 3,081 2,655 Net Debt as of Reported Dividend OneWeb equity C-Band Other Net Debt as of 30/06/21 DFCF investment proceeds 31/12/21 22

  23. Slide 23: Financial Structure

    FINANCIAL STRUCTURE  Net Debt/EBITDA ratio of 3.53x NET DEBT / EBITDA RATIO • Versus 3.09x as of 31 December 2020 and 2.88x at end June 2021 • Reflecting timing of dividend payment and of OneWeb investment whereas only 25% of C-band proceeds have 3.53x been received 3.09x  Average cost of debt aft

  24. Slide 24: Agenda

    AGENDA 1. Key Events 2. Operational performance 3. Financial performance 4. Outlook 24

  25. Slide 25: A Two-Pronged Strategy

    A TWO-PRONGED STRATEGY 1. MAXIMISE 2. DELIVER GROWTH CASH GENERATION OF THE HERITAGE IN CONNECTIVITY BUSINESSES VERTICALS GEO-enabled: • in Fixed Funding our transition towards high • Broadband via KONNECT and growth verticals… KONNECT VHTS and in other applications via selected Maximize • investmen

  26. Slide 26: Update on Key Priorities for FY 2021-22

    UPDATE ON KEY PRIORITIES FOR FY 2021-22 ► Fully deliver on LEAP 2 cost savings plan €24m savings secured for FY 22 1. MAXIMISE CASH ► Secure C-Band proceeds in FY 22 $125m booked in H1 (Phase 1) GENERATION OF THE ► Maintain all other levers of Free Cash-Flow HERITAGE Adjusted DFCF of €203m generatio

  27. Slide 27: Updated Revenue Objectives

    UPDATED REVENUE OBJECTIVES FY 22 REVENUES EXPECTED IN OUR PREDICTED MEDIUM-TERM OBJECTIVES MECHANICALLY RANGE ALBEIT IN THE LOWER HALF ADJUSTED; RETURN TO GROWTH IN FY 24  H1 revenues broadly in line with expectations, albeit  Delayed availability of KONNECT VHTS and E10B at the lower end of our g

  28. Slide 28: Substantial Growth Capacity to Progressively Support Topline

    SUBSTANTIAL GROWTH CAPACITY TO PROGRESSIVELY SUPPORT TOPLINE INCREMENTAL KEY ENTRY INTO FIRM CAPACITY MARKETS SERVICE* COMMITMENTS EUTELSAT 65 Ka spots Broadband In service since Q4 2020 KONNECT 75 Gbps Europe/Africa EUTELSAT 8 “QUANTUM” Government First agreements secured In service since Q4 2021 Q

  29. Slide 29: Financial Outlook: DFCF Objectives Confirmed

    FINANCIAL OUTLOOK: DFCF OBJECTIVES CONFIRMED ► Between €1,110 to €1,130m in FY 2021-221 OPERATING VERTICALS ► Material improvement in trend in FY 2022-23 REVENUES1 Mechanically adjusted for growth assets delays ► Growth in FY 2023-24 ► Not exceeding €400m2 per annum for each CASH CAPEX of the next t

  30. Slide 30: To Sum Up

    TO SUM UP Ongoing strong cash-flow generation with H1 figures well on track to meet FY target Topline trend to improve significantly from FY 23, although less than expected due to incremental capacity availability delay • Growth from FY 24 underpinned by substantial firm commitments Adjusted DFCF ob

  31. Slide 31: Disclaimer

    DISCLAIMER This presentation does not constitute or form part of and should not be construed as any offer for sale of or solicitation of any offer to buy any securities of Eutelsat Communications, nor should it, or any part of it, form the basis of or be relied on in connection with any contract or

  32. Slide 32: Future Launches

    FUTURE LAUNCHES EUTELSAT 10B EUTELSAT KONNECT EUTELSAT EUTELSAT 36D NAME HOTBIRD 13G VHTS HOTBIRD 13F Orbital 10° East 13° East TBD 13° East 36° East Position Approx . Entry H2 2023 into service H1 2023 H1 2023 Vs H1 2023 Q2/Q3 2023 H2 2024 date1 previously Manufacturer Coverage EMEA, Atlantic & Eur

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