Inmarsat — FY2011 Earnings Presentation
25 slides from Inmarsat's earnings presentation, Mar 6, 2012
Slide 1: Q4 & preliminary full year results 2011
Inmarsat plc Q4 & preliminary full year results 2011 6 March 2012
Slide 2: Forward-looking statements
Forward-looking statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual result
Slide 3: Preliminary results 2011
Preliminary results 2011 Andrew Sukawaty Executive Chairman 3
Slide 4: 2011 financial highlights
2011 financial highlights Total revenue up 20% to $1,409m (2010: $1,172m) • Inmarsat Global revenue up 25% to $958m (2010: $764m) EBITDA up 23% to $854m (2010: $696m) • Inmarsat Global EBITDA up 26% to $723m (2010: $573m) Profit before tax up 10% to $367m (2010: $334m) Adjusted EPS 53 US cents (2010
Slide 5: Total dividends
Total dividends 40.36 cents US$ cents 36.69 cents 30 +10% 24.96 25 22.69 20 15.40 14.00 15 10 5 Interim Final Interim Final 0 FY 2010 FY 2011 5
Slide 6: Key messages
Key messages Positive trends in core MSS business Underlying cost growth minimal Solid cash flow Reiterate commitment to lift 2012 dividend by 10% Reorganised internal structure in place Fully funded for capital investment period ahead Strong belief in new investment returns 6
Slide 7: Q4 & preliminary results 2011
Q4 & preliminary results 2011 Rick Medlock Chief Financial Officer 7
Slide 8: Inmarsat plc – 2011 full year results
Inmarsat plc – 2011 full year results Financial year US$m 2011 2010 Revenue 1,408.5 1,171.6 20.2% Operating costs (554.1) (475.5) (16.5%) EBITDA 854.4 696.1 22.7% Depreciation & amortisation (245.8) (234.6) Impairment (141.5) — Other (0.6) (0.9) Operating profit 466.5 460.6 1.3% Net interest payable
Slide 9: Inmarsat plc – 2011 cash flow
Inmarsat plc – 2011 cash flow Financial year US$m 2011 2010 EBITDA 854.4 696.1 22.7% Working capital/non-cash items 136.8 89.7 Operating cash flow 991.2 785.8 Capital expenditure (531.0) (180.7) Cash interest (76.7) (92.0) Cash tax (112.6) (42.8) Free cash flow 270.9 470.3 (42.4%) 9
Slide 10: Inmarsat plc – net debt & liquidity
Inmarsat plc – net debt & liquidity Net debt Available $1,361 liquidity 1,600 $1,356 1,400 Convertible $310 1,400 Bond 2017 1,200 1,200 Senior 1,000 Senior Notes $650 Facility $750 Due 2017 1,000 (undrawn) 800 US$m US$m 800 600 Ex-Im Bank $277 600 400 2023 Ex-Im 200 EIB Facility $308 400 Bank $423 (
Slide 11: Inmarsat Global – Q4 MSS revenue
Inmarsat Global – Q4 MSS revenue US$m -0.7% 200 $179.0 180 $177.7 Maritime data revenues up year 25.6 Leasing over year and sequentially on 160 +9.0% 27.9 Q3, maritime voice up on Q3 Aviation 140 24.2 +0.4% 24.3 Land mobile impacted by 120 Land decline from Afghanistan 37.9 Mobile 34.4 100 -9.2% • E
Slide 12: Inmarsat Solutions - Q4 revenue
Inmarsat Solutions - Q4 revenue +12.1% US$m $196.1 200 $175.0 180 Inmarsat MSS revenue 160 Broad- impacted by: band and 95.0 140 69.4 Other MSS • Pricing pressure in distribution +36.9% channel 120 • Factors consistent with Inmarsat 100 Global Q4 80 Growth in Broadband driven Inmarsat 60 105.6 MSS -
Slide 13: Outlook & Medium Term Targets
Outlook & Medium Term Targets Inmarsat Global MSS revenue growth 2012 to 2013, 0% to 2% (CAGR) • Growth in key established services, FleetBroadband, IsatPhone and SwiftBroadband • Land (BGAN), aviation (Swift64), and leasing all impacted by declining revenue from Afghanistan • Minimal underlying cos
Slide 14: Financial summary
Financial summary Profit before tax up 10% to $366.9m 9 Free cash flow $270m 9 Dividend increase 10% 9 Dividend covered by adjusted EPS 9 >$1.3bn of liquidity in place 9 Investments programmes on track 9 No increases in capital expenditures 9 Limited cost growth 9 14
Slide 15: Operations and strategy review
Operations and strategy review Rupert Pearce Chief Executive Officer 15
Slide 16: Maritime – FBB migration update
Maritime – FBB migration update FleetBroadband (“FBB”) ARPU growth FleetBroadband ARPUs 613 • >$600 in Q4 2011, up 15% in year 620 600 582 580 9,818 net FBB adds in 2011 560 $US 537 • 25,823 total at 31 Dec 540 533 • 2,276 net adds in Q4 520 500 • 6,600 Inmarsat Bs still active 480 Q1 2011 Q2 2011 Q
Slide 17: Maritime – key developments
Maritime – key developments XpressLink (“XL”) service begins installations • Combined L-band / Ku-band service offering, fixed monthly rate • At Feb 2012, 111 terminals in billing and 65 terminals in backlog • Frontline - major customer order for >100 vessels Pricing changes to be implemented in sta
Slide 18: IsatPhone Pro
IsatPhone Pro IsatPhone Pro subscribers 60,000 50,000 50,000 active subscribers 40,000 reached in Q1 2012 30,000 High share of new terminal 20,000 activations 10,000 0 On target to achieve market Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 TD 2012 share objectives in 2012 Net subscriber adds Tra
Slide 19: SwiftBroadband
SwiftBroadband SwiftBroadband 2011 highlights • Revenue $13m • EoY >2,400 active channels installed • Emirates - rollout on A380s to offer on board Wi-Fi • Small, light SB200 gained momentum SwiftBroadband 2012 – In development • SwiftBroadband Safety Services development • High data rates up to 700
Slide 20: Global Xpress programme update
Global Xpress programme update Space Segment: • On track and now well into the programme. Design phase is complete, and hardware is being delivered by subcontractors and integrated by Boeing. Launch of F1 still scheduled for early Q3 2013 Ground Segment: • iDirect and SED on schedule for network and
Slide 21: LightSquared update
LightSquared update LightSquared failed to make $56m payment in February • Next payment due 31 March, $30m 60-day remedy period will expire 20 April • If payments not resumed, Inmarsat expects to enforce contract termination provisions Inmarsat and LightSquared in discussion on future of Cooperation
Slide 22: Strategy
Strategy Three strategic objectives Position Inmarsat-4 services for renewed growth Successfully launch Inmarsat-5 services (GX) Bridge into solutions, not ‘mere’ connectivity Each strategic objective complements the others • Inmarsat-5 services complement Inmarsat-4 service • Inmarsat-4 services co
Slide 23: Summarising our strategy…
Summarising our strategy… Go beyond ATC satellite capacity & S-band Air Passenger Successfully Connectivity launch Government / Military Global Xpress UAVs Re-position Managed Services I-4 based Rapid response franchise VSAT Services portability Maritime and Capacity Leasing Energy Handheld Voice Gl
Slide 24: Summary
Summary Continued leading MSS market position with strong subscriber 9 growth Long term value and growth potential in core MSS business 9 Well defined strategy to deploy next generation GX services 9 GX services to address substantive established market opportunities 9 EBITDA inflection point and ex
Slide 25: Questions & Answers
Questions & Answers »y ss inmarsat