Inmarsat — H1 2015 Earnings Presentation
23 slides from Inmarsat's earnings presentation, Aug 6, 2015
Slide 1: Interim Results 2015
INMARSAT > Finance > Interims 2015 Interim Results 2015 6th August 2015
Slide 2: Forward looking Statements
Interim Results 2015 6 August 2015 Forward looking Statements This announcement contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors that may cause our actu
Slide 3: Interim Business Review 2015
INMARSAT > Finance > Interims 2015 Interim Business Review 2015 Rupert Pearce Chief Executive Officer
Slide 4: Growing markets
Growing markets Demand for global mobile broadband – satellite a key enabler ˃ Smart Ship to Drone Ship ˃ Global Coverage Maritime ˃ Crew Welfare ˃ High Speed Broadband ˃ ‘AISR’, situational awareness, ‘BLOS’ Governments ˃ Morale, welfare & recreation ˃ On the move ˃ Energy, Resources, Transportatio
Slide 5: Focused strategy
Focused strategy Clear roadmap to sustained profitable growth Grow in core markets > Innovate & expand into new markets > New services & applications Core L-band Global Xpress EU Aviation Network Safety Mobile Resilience Coverage High capacity Ultra-high throughput Agile High speed hybrid network Re
Slide 6: Business developments
Business developments Global Xpress: New F3 launch date establishes momentum ˃ F1 already in commercial service ˃ F2 in commercial service late August ˃ Satellite Access Stations all completed Target of $500m of ˃ Strong distribution network in place incremental annual revenue by fifth anniversary o
Slide 7: Q2: Maritime
Q2 : Maritime Growth in new products offset by expected legacy and non-MSS decline FleetBroadband VSAT (XL) ˃ Trade-up to FB from legacy Fleet largely completed ˃ FB connections in Q2’15 +7% y-o-y vs. +13% in FY’14 ˃ Fleet now just 7% of Maritime revenue (H1’14 14%) +17% +11% ˃ ARPU > growth driver
Slide 8: Q2: Government
Q2 : Government US more resilient; tougher environment in some non-US legacy markets ˃ Continuing budgetary constraints & lower operational tempo in many markets ˃ US a little more resilient ˃ Rate of decline is moderating ˃ Growing demand for GX ˃ Weaker quarter in non-US legacy markets – Germany &
Slide 9: Q2: Enterprise
Q2 : Enterprise Continuing strong underlying growth ˃ Underlying revenue up 8.9% +25% ˃ Increased focus on key vertical markets ˃ Energy/resources, Transportation, Security, e-Commerce, Agriculture, M2M Media, Control systems Revenue ˃ Good product pull-through ˃ FleetBroadband up 45% (Energy-driven
Slide 10: Q2: Aviation
Q2 : Aviation Continuing strong growth – developing commercial passenger opportunity ˃ Existing business - growth in cockpit, operations & safety SwiftBroadband services ˃ SwiftBroadband – higher connections & ARPU ˃ Classic Aero still delivering good growth ˃ Passenger connectivity - strong commerc
Slide 11: Q2 Summary
Q2 Summary Transition continues: robust core business + transformational new opportunities ˃ L-band business resilient ˃ Diversified markets and opportunities ˃ Core products (FB, SB) delivering strong growth ˃ GX primed to deliver a step-change in growth ˃ New I-5 F3 launch date creates renewed mom
Slide 12: Financial Review H1 2015
INMARSAT > Finance > Interim Results 2015 Financial Review H1 2015 Tony Bates Chief Financial Officer
Slide 13: Group Income statement
Group Income statement $m HY 2015 HY 2014 Change Q2 2015 Q2 2014 Change Revenue 616.2 652.3 (5.5%) 311.4 307.6 1.2% Operating costs (273.5) (282.6) 9.1 (145.5) (147.8) 2.3 EBITDA 342.7 369.7 (27.0) 165.9 159.8 6.1 Depreciation & amortisation etc (150.9) (136.1) (14.8) (75.5) (68.5) (7.0) Other 10.4
Slide 14: Revenue & EBITDA
Revenue & EBITDA $m HY 2015 HY 2014 Change Q2 2015 Q2 2014 Change Wholesale MSS revenue 403.8 387.6 4.2% 205.6 196.1 4.8% Other MSS & terminals 177.4 217.6 (18.5%) 88.4 109.7 (19.4%) LightSquared 35.0 47.1 (25.7%) 17.5 1.8 872.2% Total revenue 616.2 652.3 (5.5%) 311.4 307.6 1.2% EBITDA ex L2 307.7 3
Slide 15: Maritime Business Unit Results - H1
Maritime $m Business Unit Results - H1 350 300.8 297.1 300 ˃ FleetBroadband +20% 250 226.3 230.7 ˃ VSAT/XpressLink +12% 200 ˃ Fleet -53% 150 ˃ EBITDA margin: 100 ˃H1 2015: 77.7% 50 ˃H1 2014: 75.2% 0 Revenue EBITDA H1 2014 H1 2015 15
Slide 16: Maritime Quarterly Product Revenue
Maritime Quarterly Product Revenue (year-on-year change) 130.0 +100% 35.0 +100% 110.0 FleetBroadband 30.0 VSAT +80% +80% +24% +17% 25.0 +13% +11% 90.0 +32% +22% +23% +20% +29% +26% +29% +19% +60% 20.0 +60% 70.0 15.0 +40% 50.0 +40% Proportion of Maritime 10.0 30.0 H1 2015 Revenue +20% +20% 5.0 10.0 -
Slide 17: Government Business Unit Results - H1
Government $m Business Unit Results – H1 180 160.0 160 ˃ Budget and Op Tempo pressure 140 137.2 ˃ Slower decline in the US 120 107.5 100 92.2 ˃ Revenue down 16% (37%) 80 ˃ Tough elsewhere 60 ˃ Europe down 9% 40 ˃ Australia down over 30% 20 ˃ Growth overall elsewhere 0 Revenue EBITDA ˃ EBITDA margin:
Slide 18: Enterprise Business Unit Results - H1
Enterprise $m Business Unit Results – H1 90 80 10.8 ˃ Asset disposals 70 60 ˃ FB +48% 50 1.6 ˃ M2M +27% 40 73.5 79.3 30 47.9 52.6 ˃ BGAN -2% 20 ˃ GSPS flat 10 ˃ EBITDA margin: 0 Revenue EBITDA ˃2015: 66.3% 2014 Disposals ˃2014: 58.7% 2015 Revenue 2014 Revenue ex Disposals 18
Slide 19: Aviation Business Unit Results - H1
Aviation $m Business Unit Results – H1 60 57.9 48.3 ˃ SwiftBroadband revenue +44% 46.0 41.9 ˃ Take or Pay 40 ˃ Investment in capability 20 ˃ EBITDA margin: ˃H1 2015: 83.4% ˃H1 2014: 91.1% 0 Revenue EBITDA H1 2014 H1 2015 19
Slide 20: Group Cash Flow
Group Cash Flow US$m H1 2015 H1 2014 Change Q2 2015 Q2 2014 Change EBITDA 342.7 369.7 (27.0) 165.9 159.8 6.1 Working capital/non-cash items 21.2 (63.3) 84.5 5.2 (3.6) 8.8 Operating cash flow 363.9 306.4 57.5 171.1 156.2 14.9 Capital expenditure (240.8) (205.1) (35.7) (152.1) (109.4) (42.7) Interest
Slide 21: Net debt
Net debt $m 1,900.7 1,921.6 2000 ˃ Overall profile little changed over the first 304.4 +12.5 316.9 half of this year 1750 ˃ New revolving credit facility 1500 ˃ $500m, five years, lower cost 992.4 +0.6 993.0 1250 ˃ Stronger bank group 1000 ˃ Average interest rate now 3.98% 750 ˃ Maturities run from
Slide 22: Outlook/Guidance
Outlook/Guidance ˃ Annual GX revenues of $500m by the fifth anniversary of Global Commercial Service Introduction ˃ No material change in the trading environment in the second half ˃ Revenues $1,250-$1,300m ˃ Includes L2 and latest GX timing ˃ Capex $450m-500m for 2015, below $400m for 2016 and 2017
Slide 23: Q&A
INMARSAT > Finance > Interim Results 2015 Interim Results 2015 Q&A