SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — Q3 2018 Earnings Presentation
31 slides from SES SA FDR (Class A)'s earnings presentation, November 2018
Slide 1: Investor Presentation November 2018
INVESTOR PRESENTATION NOVEMBER 2018 YTD and Q3 2018 Results |
Slide 2: Contents
Contents 1) Executive Summary and Business Overview Page 3-4 2) Q3 2018 Results Highlights Page 5 3) Financial Outlook and Strategic Priorities Page 6-7 4) SES Video Page 8-9 5) SES Networks Page 10-13 6) U.S. C-band Initiative Page 14 7) Conclusion Page 15 8) YTD & Q3 2018 Results P
Slide 3: Executive Summary
Executive Summary World’s leading satellite-enabled solutions provider Since appointment of new CEO and CFO in February 2018, business has been focused on execution: • First nine months’ results in line with our expectations, supported by growth in underlying revenue on the back of double-digit
Slide 4: World's Leading Satellite-enabled Solutions Provider
World’s Leading Satellite-enabled Solutions Provider 99% coverage of the world EUR 2BN annual revenue EUR 7BN contract backlog EUR 9BN market cap. 99.999% service reliability EUR 1.3BN annual EBITDA <3.3x net debt / EBITDA EUR 13BN enterprise value Video Networks EUR 1.3BN revenue EUR 0.7BN revenue
Slide 5: Solid Q3 and YTD 2018 Results Reflect Continued Focus on Execution
Solid Q3 and YTD 2018 Results Reflect Continued Focus on Execution Revenue EUR 1,469.4 million, with underlying revenue up 2.1%(1) 13.6% growth in networks underlying revenue, and +19.5% in Q3 Video lower by 2.8% with improved performance from video services Delivering group EBITDA EUR 927.7
Slide 6: Growing Revenue and EBITDA Through Expansion of SES Networks
Growing Revenue and EBITDA Through Expansion of SES Networks Revenue and EBITDA(1) EUR million 2,110 – 2,210 2,011 >40% of 32% of revenue | Networks revenue ▲ Strong growth engine for the SES business ▲ Satellite becoming more mainstream in data networks 68% of <60% of revenue revenue | Video ▲ Larg
Slide 7: Our Strategic Priorities
Our Strategic Priorities | Video Reinforce and drive value through our core video neighbourhoods Develop OTT and orchestration capabilities to support our content provider customers reach new markets and audiences MOVING IMAGES THAT MOVE THE WORLD Take advantage of opportunities to maximise ef
Slide 8: Large, Highly Profitable and Resilient Video Business
Large, Highly Profitable and Resilient Video Business 8,020 351 million 40 EUR 5 billion 10 YEARS TV channels TV homes DTH platforms contract backlog typical contract length VIDEO DISTRIBUTION (75% of Video 2018 revenue) VIDEO SERVICES ~15% (25% of Video 2018 revenue) Europe (~50%): leading video ne
Slide 9: SES Video Market Dynamics
SES Video Market Dynamics Number of TV channels(1) Transponder demand(2) Key drivers 9,000 600 Outlook: stable Europe 6,000 400 ▲ Adding premium/live content in higher quality ~50% (HD/UHD) offsetting SD switch-off of total Video 3,000 200 ▲ Reach in Western Europe expected to remain 2017 2018 2019
Slide 10: Expanding Networks Business Is The Growth Engine For SES
Expanding Networks Business Is The Growth Engine For SES >10% CAGR Unique GEO-MEO MEF CE 2.0 EUR 2 billion 3-5 YEARS revenue (2017-2020) and terrestrial network telco-grade certification contract backlog typical contract length MOBILITY (~25% of Networks 2018 revenue) ~25% GOVERNMENT Home equivalent
Slide 11: SES Networks Market Dynamics
SES Networks Market Dynamics Vertical Demand drivers Global ComSatCom services spending USD billion(1) Outlook: Strong growth 7.4 ▲ Growing need for Intelligence, Surveillance, Recognition Government 8.0 and resilience and other data hungry applications ~40% 6.0 4.0 4.0 ▲ Demand for reliable and sec
Slide 12: O3b mPOWER - Multi-Orbit Intelligent Ground Network
O3b mPOWER - MULTI-ORBIT INTELLIGENT GROUND NETWORK DRIVING EXPERIENCE SEGMENT FOCUSED OUTCOME DRIVEN GLOBAL REACH FULLY MANAGED MEF 2.0 CERTIFIED ETHERNET and IP SERVICES FIBER-LIKE INTELLIGENT EDGE PERFORMANCE INFRASTRUCTURE Investor presentation November 2018
Slide 13: O3b mPOWER
O3b mPOWER Multi-terabit 4,000+ 400M 100% productive beams go only to customers scalable to 10s of Tbps globally beams per satellite square kilometres covered not empty territory CURRENT MEO NEW OPPORTUNITIES FROM 2021 16 satellites in service(1) plus four launching in 2019 serving: Seven super-powe
Slide 14: U.S. C-band Initiative
U.S. C-band Initiative Satellite operators proposed to the FCC a market-based proposal to clear portions of C-band spectrum to support the introduction of 5G services in the U.S. Win-win, freeing up important spectrum quickly to support mid-band 5G roll-out across the U.S. while protecting and e
Slide 15: Strong Focus on Execution to Drive Growth and Shareholder Value
Strong Focus on Execution to Drive Growth and Shareholder Value 5%-10% growth(1) ▲ Fuelled by double-digit growth in Networks Growing revenue (2018-2020) ▲ Underpinned by large and resilient Video business 6%-11% growth(1) ▲ Investing in managed service capabilities, supporting networks expansion Gr
Slide 16: YTD & Q3 2018 Results
SES‘ YTD & Q3 2018 RESULTS
Slide 17: YTD 2018 Financial Highlights
YTD 2018 Financial Highlights Revenue EUR 1,469.4 million including 2.1% growth in underlying revenue compared with YTD 2017 • Group revenue -3.8% (YOY) as reported, including impact of FX; and +0.4% (YOY) at constant FX including periodic and other revenue EBITDA EUR 927.7 million (-6.7% as rep
Slide 18: SES Video: Solid Fundamentals Underpinning Resilient and Profitable Business
SES Video Solid Fundamentals Underpinning Resilient and Profitable Business SES Video revenue EUR million ▲ Large, profitable and resilient video neighbourhoods, 1,002.3 977.4 complemented by value-added video services Underlying -2.8% ▲ 96% of 2018 expected revenue now contracted ▲ 8,020 total TV c
Slide 19: SES Networks: Differentiated Services Driving Double-digit Underlying Growth
SES Networks Differentiated Services Driving Double-digit Underlying Growth SES Networks revenue EUR million 491.0 ▲ Growth engine for SES – integrating satellite into the 456.0 mainstream ecosystem of data networks 478.1 421.1 ▲ 97% of 2018 expected revenue now contracted ▲ >30 government sites now
Slide 20: Positive Momentum in Underlying Revenue
Positive Momentum in Underlying Revenue Revenue walk EUR million Underlying revenue up EUR 29.2 million (or 2.1%) at constant FX compared with prior year Total revenue stabilised at constant FX (+0.4%), with Q3 2018 +2.4% compared with Q3 2017 at constant FX Investor presentation November 2018 2
Slide 21: EBITDA Development Reflects Investment in Fast-growing SES Networks
EBITDA Development Reflects Investment in Fast-growing SES Networks EBITDA walk EUR million EBITDA EBITDA EBITDA margin margin margin 65.1% 65.3% 63.1% Change in recurring OpEx (EUR 24.3 million) principally reflects investment in expanding capabilities of SES Networks EBITDA margin 63.8% exclud
Slide 22: YTD 2018 Leverage Development
YTD 2018 Leverage Development Net debt to EBITDA Times(1) 3.53 3.43 3.41 3.27 3.09 2016 2017 Q1 2018 Q2 2018 Q3 2018 Increase on FY 2017 reflects lower 12-month rolling EBITDA and higher proportion of CapEx, interest and dividend payment in H1 2018 YTD 2018 Free Cash Flow before financing activi
Slide 23: Reduction in CapEx through Innovation and Fleet Optimisation
Reduction in CapEx through Innovation and Fleet Optimisation 2018 CapEx expected to be EUR 80 million lower compared to guidance published in July 2018 CapEx reduction of -28% during the period 2010 to projected 2022 (5-year rolling average) CapEx to sales ratio from 35%-40% to 20%-25% from be
Slide 24: Financial Outlook
Financial Outlook Business On Track to Execute on Financial Outlook FY 2018 FY 2020 SES Video revenue EUR 1,320 - 1,335 million EUR 1,250 - 1,300 million SES Networks revenue EUR 660 - 690 million EUR 850 - 900 million Other revenue Approximately EUR 10 million Approximately EUR 10 million Group rev
Slide 25: Supplementary Information
SUPPLEMENTARY INFORMATION 25
Slide 26: Governance and Shareholder Structure
Governance and Shareholder Structure The Board of Directors Shareholding structure as of 18 October 2018 ▲ A and B Shares, each share is entitled to one vote and a B-share carries 40% of the economic Defines company’s strategic objectives and overall corporate plan. Is also responsible rights of an
Slide 27: SES' Senior Leadership Team
SES’ Senior Leadership Team The Senior Leadership Team A collegial body, in charge of the daily management of the group; is mandated to plan/execute the overall strategy, approved by the Board 8 Members, nominated by the board of directors, Including President and CEO, CEO Video, CEO Networks, CFO,
Slide 28: Compliance and Corporate Social Responsibility
Compliance and Corporate Social Responsibility Compliance ▲ SES is committed to conduct its business in compliance with all laws and regulations as well as to observe the highest standards of business ethics ▲ We support and develop initiatives that showcase the strength of satellite to tackle insti
Slide 29: Financial Calendar and Stock Market Information
Financial Calendar and Stock Market Information Financial calendar Stock market info Event Date ▲ Listed on Euronext Paris and SES share price (EUR) Luxembourg Stock Exchange 30 FY 2018 results February 2019 ▲ Bloomberg: SESG FP equity 20 10 ▲ Reuters: SESFd.PA Q1 2019 results April 2019 0 ▲ ISIN: L
Slide 30: SES Investor Relations Contacts
SES Investor Relations Contacts Richard Whiteing Antoine De Brosses Vice President Manager Head of Investor Relations Investor Relations richard.whiteing@ses.com antoine.debrosses@ses.com +352 710725 261 +352 710725 413 +352 691 898956 Ralph Rauschenberger Michelle Suc Vice President Investor Relati
Slide 31: Disclaimer
Disclaimer This presentation does not, in any jurisdiction, including without limitation in the U.S., constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, or any investment advice in connection with, any securities of SES, nor should