Inmarsat — FY2014 Earnings Presentation
27 slides from Inmarsat's earnings presentation, Mar 5, 2015
Slide 1: Preliminary Results 2014
INMARSAT > Finance > Results 2014 Preliminary Results 2014 5th March 2015
Slide 2: Forward looking Statements
INMARSAT > Finance > Results 2014 Preliminary Results 2014 5th March 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 an
Slide 3: Introduction
INMARSAT > Finance > Results 2014 Introduction Andrew Sukawaty Chairman
Slide 4: Confidence in our ongoing ability to deliver
Confidence in our ongoing ability to deliver Building on our track record – major steps forward in 2014 Total Shareholder Return vs. FTSE 250 June 2005 IPO to end Feb. 2015 ˃ Continuing leadership in global Mobile Satellite Services +413% ˃ Global Xpress will accelerate our growth ˃ Aviation market
Slide 5: Business Review 2014
INMARSAT > Finance > Results 2014 Business Review 2014 Rupert Pearce Chief Executive Officer
Slide 6: Our market
Our market Explosive growth in global mobile broadband – including satellite communications Global Internet traffic increasing Fixed and mobile network deployment Petabytes per month continuing globally 132 76 Source: 51 Cisco VNI Mobile 2014 2013 2015 2018 Need for more capacity and services Need f
Slide 7: Our strategy
Our strategy Clear roadmap to sustained profitable growth ˃ Continued L-band growth ˃ Create solutions eco-system ˃ New growth via GX & S-band ˃Grow value of core markets ˃New value drivers & differentiators ˃New super-fast broadband MSS services ˃Innovate to expand beyond core ˃New revenue streams
Slide 8: Our structure
Our structure Focused on customers Marketplace & Customers US Global Maritime Enterprise Aviation Government Government Business Units Capabilities Investment Operations (COO) Innovation Development & Engineering (CTO) 8
Slide 9: Business highlights: Global Xpress
Business highlights Major advances in delivery of GX opportunity ˃ Commercial services started on F1 on 1 July 2014 ˃ Highly successful US Government trial ˃ On track to launch ˃ Initial customer experience ahead of expectations global commercial ˃ F2 launched successfully on 1 Feb. 2015 services in
Slide 10: Business highlights: L-band and S-band
Business highlights Solid delivery in L-band and good progress in developing S-band L-band: ˃ Continuing underlying growth except Govt. in US On track for 2014-16 wholesale ˃ Wholesale MSS revenue growth of 3.8% MSS revenue CAGR of 8-12% ˃ Continued delivery on innovation & growth plans S-band: ˃ Sa
Slide 11: Business highlights: Corporate developments in 2014
Business highlights Corporate developments in 2014 Acquisition of Globe Wireless ˃ Expands our installation capabilities – enables faster roll-out of GX & transition of XL ˃ Leverages key on-board server technology for GX/FB and Fleet Media initiatives Disposal of retail energy related assets to Rig
Slide 12: Maritime
Maritime Growth in data usage driving customer upgrades FleetBroadband 40,469 ˃ Customer migration driving revenue growth 35,888 ˃ From legacy Fleet service onto FB ˃ Within FB, onto higher rate plans +24% ˃ Early incursion into Maritime VSAT with XL End 2013 End 2014 Revenue Installed Ships ˃ Legac
Slide 13: Government
Government Continued weakness in traditional markets; growth in new areas ˃ Lower traditional revenues ˃ Revenue outside US grew c. 1% ˃ US and other governments ˃ New countries served (+24 in 3 yrs) ˃ Disproportionate budget pressures ˃ LatAm, Asia, smaller Eur. countries ˃ Reduced operational requ
Slide 14: Enterprise
Enterprise Range of sectors and services driving good underlying growth ˃ Strong M2M performance ˃ 292,000 devices across all M2M product lines at year-end +30% ˃ Expanded ORBCOMM relationship – drives IsatData Pro M2M ˃ Good wholesale revenue growth in energy sector Revenue ˃ Enabled by expanded re
Slide 15: Aviation
Aviation Strong growth from cockpit and cabin connectivity Active SIMS ˃ Overall Aviation ARPU grew 23% to >$1,000 SwiftBroadband ˃ Growing industry focus on safety/operations connectivity 5,450 4,113 +33% ˃ First SB safety/ACARS installation - Hawaiian Airlines ˃ Strongly supporting industry initia
Slide 16: Looking ahead
Looking ahead From transition to transformation 2014 ˃ A solid financial performance despite some temporary headwinds – shows strength in our model ˃ A year of transition as we bring GX to market & continue the L-band re-invention ˃ European aviation passenger connectivity initiative adds another ma
Slide 17: Financial Review 2014
INMARSAT > Finance > Results 2014 Financial Review 2014 Tony Bates Chief Financial Officer
Slide 18: Group Income statement
Group Income statement $m 2014 2013 Change Q4 2014 Q4 2013 Change Revenue 1,285.9 1,261.9 1.9% 333.0 314.8 5.8% Operating costs (584.9) (613.1) 28.2 (167.7) (163.9) (3.8) EBITDA 701.0 648.8 52.2 165.3 150.9 14.4 Depreciation & amortisation etc (290.4) (225.2) (65.2) (79.7) (61.8) (17.9) Impairment (
Slide 19: Revenue & EBITDA
Revenue & EBITDA $m 2014 2013 Change Q4 2014 Q4 2013 Change Wholesale MSS revenue 791.4 762.4 3.8% 211.8 194.4 9.0% Other MSS & terminals 419.1 487.3 (14.0%) 102.7 118.0 (13.0%) LightSquared 75.4 12.3 513% 18.5 2.4 670% Total revenue 1,285.9 1,262.0 1.9% 333.0 314.8 5.8% Energy assets to RigNet 21.4
Slide 20: Maritime Business Unit Results
Maritime $m Business Unit Results 700 595.6 600 524.8 86.5 ˃ Globe acquisition 500 31.4 450.4 416.5 ˃ FleetBroadband +24% 400 ˃ XpressLink +26% 300 493.4 509.1 ˃ Fleet -19% 200 ˃ EBITDA margin: 100 • 2014: 75.6% 0 Revenue EBITDA • 2013: 79.4% 2013 ex GW impact 2014 ex GW impact 2013 GW impact 2014 G
Slide 21: Government Business Unit Results
Government $m Business Unit Results 408.3 400 ˃ Continuing market pressure 319.9 300 267.9 ˃ New market entry 216.4 ˃ EBITDA margin: 200 • 2014: 67.6% • 2013: 65.6% 100 0 Revenue EBITDA FY 2013 FY 2014 21
Slide 22: Enterprise Business Unit Results
Enterprise $m Business Unit Results 250 221.6 200 ˃ Energy assets to RigNet 166.7 ˃ M2M, GSPS, FB 150 84.9 21.4 115.6 ˃ BGAN 100 102.1 136.7 145.3 ˃ EBITDA margin: 50 • 2014: 61.2% • 2013: 52.2% 0 Revenue EBITDA 2013 Revenue ex RigNet 2014 Revenue ex RigNet 2013 RigNet 2014 RigNet 22
Slide 23: Aviation Business Unit Results
Aviation $m Business Unit Results 101.1 100 87.2 ˃ SwiftBroadband +67% 80 73.4 67.2 ˃ Take or Pay Q4 60 ˃ Investment in capability 40 ˃ EBITDA margin: 20 • 2014: 81.1% • 2013: 89.7% 0 Revenue EBITDA FY 2013 FY 2014 23
Slide 24: Group Cash Flow
Group Cash Flow US$m 2014 2013 Change Q4 2014 Q4 2013 Change EBITDA 701.0 648.8 52.2 165.3 150.9 14.4 Working capital/non-cash items (47.6) (34.0) (13.6) (16.1) (25.0) 8.9 Operating cash flow 653.4 614.8 38.6 149.2 125.9 23.3 Capital expenditure (405.7) (580.9) 175.2 (115.7) (181.4) 65.7 Interest pa
Slide 25: Net debt
Net debt $m 1812.8 +87.9 1900.7 2000 304.4 -24.2 ˃ Convertible interest adjustment 1750 328.6 ˃ New Senior Notes 1500 1250 992.4 ˃ New Ex-Im facility 855.9 +136.5 1000 ˃ Lower average interest rate 750 ˃ Leverage 2.7x (2013: 2.8x) 500 543.5 +93.5 637.0 ˃ $1.2bn liquidity at 31 December 2014: 250 • C
Slide 26: Outlook/Guidance
Outlook/Guidance ˃ Wholesale MSS revenue CAGR of 8%-12% for 2014 – 16 ˃ Annual GX revenues of $500m by the fifth anniversary of Global Commercial Service Introduction ˃ 2015 trading environment expected to be broadly similar to 2014 ˃ Capex $450m-500m for 2015, below $400m for 2016 and 2017
Slide 27: Preliminary Results 2014
INMARSAT > Finance > Results 2014 Preliminary Results 2014 5th March 2015