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 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 Corporat
Slide 3: Disclosures: Forward-looking Statements
Disclosures 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, and “fo
Slide 4: Investment highlights
Investment highlights Leading global satellite operator with Developing highly advanced low earth orbit diversified revenue and long-term visibility (LEO) satellite network to capture fast across blue chip customer base growing enterprise broadband market C$745M1 LTM Revenue ~US$320B Addressable Ent
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 15 in Existing orbit GEO satellites Geostationary Business today Enterprise 52% ▲ Satellite-delivered broadband and By Service Type communications services for telcos, MNOs, ISPs, aviation, maritime, oil & gas, and go
Slide 6: Demand for broadband continues to increase dramatically with users requiring low latency connectivity
Demand for broadband continues to increase dramatically with users requiring low latency connectivity Global data consumption over telecom networks is Internet, 5G and Cloud expected to nearly triple between 2022-2027 applications need low latency 9,693,738 Petabytes Cloud and 5G application perform
Slide 7: Telesat estimates Total Addressable Market for LEO services in 2032 to be ~US$650B
Telesat estimates Total Addressable Market (TAM) for LEO services in 2032 to be ~US$650B ~US$650B Total LEO TAM ~US$320B Enterprise Telesat Lightspeed focus ~US$292B Terrestrial/Enterprise ~US$320B ~US$17B ~US$650B Aviation ~US$5B Maritime ~US$6B ~US$330B Government Direct to Consumer ~US$320B Enter
Slide 8: Telesat Lightspeed is optimized for enterprise and government users and highly capital efficient
Telesat Lightspeed is optimized for enterprise and government users and highly capital efficient Guiding design principles Compelling enterprise value proposition Low Latency 30 to 50 msec High Speed & High Capacity Customer-driven design to meet the Gbps links requirements of global enterprise cust
Slide 9: Telesat Lightspeed's enterprise class service empowered by highly advanced digital technologies
Telesat Lightspeed’s enterprise class service empowered by highly advanced, state-of-the-art digital technologies Highly flexible Digital Beamforming Antenna each satellite generates +1,500 beams (~300,000 in total) to dynamically and efficiently deliver service to users Digital Processor on-board e
Slide 10: Telesat Lightspeed timeline
Telesat Lightspeed timeline Technology demo Launches begin Global service 156 satellites in 198 satellites in on LEO 3 Field Trials begins orbit orbit Network Emulator Q2 2026 Q4 2027 Q1 2028 Q4 2030 2023 10
Slide 11: Telesat Lightspeed delivers enterprise-class service to key market verticals
Telesat Lightspeed delivers enterprise-class service to key market verticals that lack high-performing broadband Enterprise/Terrestrial Maritime Aviation Government US$292B TAM 2032 US$5B TAM 2032 US$17B TAM 2032 US$6B TAM 2032 2032 Telesat rev. estimate: 2032 Telesat rev. estimate: 2032 Telesat rev
Slide 12: Governments of Canada, Ontario and Quebec strongly support Telesat Lightspeed
Governments of Canada, Ontario and Quebec strongly support Telesat Lightspeed: ~US$2.6 Billion in aggregate funding1 ~US$2.1B Government financing commitments for Telesat Lightspeed1 Funding commitments from Governments of Canada and ~US$0.5B Ontario to bridge Digital Divide in, respectively, Canada
Slide 13: Telesat anticipates strong revenue growth driven by fast-growing demand
Telesat anticipates strong revenue growth driven by fast-growing demand and compelling enterprise-grade service value proposition US$M $3,200 Telesat expects to capture ~1% of 2032 US$320 billion Enterprise TAM with EBITDA margin in line with its historic GEO performance $600 2028 2029 2030 2031 203
Slide 14: Financial Overview
Financial Overview TELESAT. a
Slide 15: Financial Highlights
Financial Highlights C$1.5B Significant contractual backlog provides high revenue visibility Revenue Backlog1 C$563M Capital efficient business model with high asset utilization Free Cash Flow2 ~75%+ Margin Demonstrated disciplined execution enables High Adjusted EBITDA margin (2020 – 2022) Telesat
Slide 16: Consistent and stable historical financial performance
Consistent and stable historical financial performance – high operating margins and strong free cash flow Revenue Adj. EBITDA1 86% 85% 77% Beginning of Year Backlog as % of Revenue Adj. EBITDA Margins Free Cash Flow2 $ 637 $ 595 3 $ 563 2020 2021 2022 1 Adjusted EBITDA and Adjusted EBITDA margin are
Slide 17: Recent Performance – Q3 YTD 2023 Update
Recent Performance – Q3 YTD 2023 Update Generated total revenues of C$538.3 million Financial Summary - YTD decrease in revenues of C$14 million (or 3%) compared to the 9 month ending September 30 same period last year. When adjusting for changes in foreign (C$ M) 2022 2023 exchange rates, revenue
Slide 18: Strong financial performance and value creation
Strong financial performance and value creation Adjusted EBITDA (C$M) 1 1 Adjusted EBITDA Adjusted EBITDA Margin 74% $549 $331 58% 2007 2023 Q3 LTM Cash Generation and Uses Net Debt/Adjusted EBITDA1 Ratio Between 2007 and Q3 2023, Telesat: • C$6.3B in operating cash flow 8.3 • C$3.1B invested in new
Slide 19: Sources and Uses Lightspeed Program
Sources and Uses Lightspeed Program | 198 Satellites Sources of Funding (US$) Uses Constellation Investment (US$) Telesat Equity $1.6B Launch and Development of Initial 156 Satellites $2.7B Government Funding1 $2.1B Operational expenditures $0.8B Vendor Financing $0.3B Contingency $0.4B Lightspeed O
Slide 20: Telesat Lightspeed Outlook
Telesat Lightspeed Outlook Revenue and EBITDA Telesat Lightspeed EBITDA Telesat Lightspeed Margin expected to be approximately in line with Revenue1 historical levels by 2029 US$M US$M $3,200 $2,700 $600 $400 2028 2029 2030 2031 2032 2028 2029 2030 2031 2032 1 As discussed on slide 13 20
Slide 21: Telesat Lightspeed CAPEX
Telesat Lightspeed CAPEX1 US$M Total Capex for 198 satellites US$3.5B Total Capex Program (2023-2030) 156 Satellites Add’l 42 Sats 198 Satellites Satellite Costs (incl. Sys Eng) 1,562M 425M US$1,987M Launch Vehicle Costs 656M 184M US$ 840M Launch Insurance Costs 77M 12M US$ 89M Ground Network and Ot
Slide 22: Conclusion
Conclusion 22
Slide 23: Telesat is strongly positioned to execute its growth plan and create significant shareholder value
Telesat is strongly positioned to execute its growth plan and create significant shareholder value 50+ years of innovation, industry firsts, engineering excellence and world class customer service Longstanding and trusted provider of mission-critical, enterprise-grade communications services to ente
Slide 24: Appendix
Appendix 24
Slide 25: Telesat's commitment to ESG
Telesat’s commitment to ESG Environmental Social Governance 1. Responsible use of space 1. Committed to STEM community 1. Equal votes across shareholders • 50+ years of experience • Major employer of co-op students • Advanced features to mitigate space traffic and • Women in STEM Annual Scholarship
Slide 26: LTM September 2023 Revenue and Adjusted EBITDA Reconciliation
LTM September 2023 Revenue and Adjusted EBITDA Reconciliation Amount in '000 CAD LTM September Q4 2022 YTD Q3 2023 30, 2023 Net income (loss) 92,340 545,298 637,638 Tax expense (recovery) 1,786 98,452 100,238 (Gain) loss on foreign exchange (72,251) (181) (72,432) Interest and other income (12,915)
Slide 27: Adjusted EBITDA YTD Q3 2023 reconciliation
Adjusted EBITDA YTD Q3 2023 reconciliation YTD Q3 YTD Q3 2022 2023 Net income (loss) $ (172,457) $ 545,298 Tax expense (recovery) 48,143 98,452 (4,314) - (Gain) loss on changes in fair value of financial instruments 311,842 (181) (Gain) loss on foreign exchange (10,561) (48,764) Interest and other i
Slide 28: Adjusted EBITDA Reconciliation 2007
Adjusted EBITDA Reconciliation 2007 Combined year ended December 31, 2007 Operating revenues $ 569,203 Net (loss) earnings $ 77,691 Income tax (recovery) expense (5,093) Other expense 1,412 Loss on foreign exchange 118,969 (Gain) loss on foreign exchange (68,445) Interest expense 52,409 Impairment l
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation FY2020 FY2021 FY2022 Revenue $ 820,468 $ 758,212 $ 759,169 Net (loss) income $ 244,820 $ 155,025 $ (80,117) Tax expense (recovery) (4,353) 78,377 49,929 Loss (gain) loss on changes in fair value of financial instruments 13,115 18,684 (4,314) Loss (gain) on foreign exch
Slide 30: Free Cash Flow Reconciliation (excluding Lightspeed capex)
Free Cash Flow Reconciliation (excluding Lightspeed capex) Free cash flow FY 2020 FY 2021 FY 2022 Adjusted EBITDA 652,597 600,409 567,913 (-) Satellite programs, including capitalized interest (9,163) (345) (619) (-) Purchase of property and other equipment (14,260) (3,886) (4,453) (-) Purchase of i
Slide 31: Investor contacts
Investor contacts: Hugh Harley +1 613 748 8424 Michael Bolitho +1 613 748 8828 IR@Telesat.com www.Telesat.com vimeo.com/telesat