SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — FY2019 Earnings Presentation
36 slides from SES SA FDR (Class A)'s earnings presentation, Mar 2, 2020
Slide 1: Full Year 2019 Results
FULL YEAR 2019 RESULTS YEAR ENDED 31 DECEMBER 2019 March 2, 2020 Full Year 2019 Results | SES Proprietary and Confidential
Slide 2: Agenda
Agenda Business Highlights Steve Collar SES CEO SES Video Ferdinand Kayser SES Video CEO SES Networks JP Hemingway SES Networks CEO Financial Review Adrien Bull Head of Financial Operations Simplify & Amplify Steve Collar SES CEO Full Year 2019 Results | 2
Slide 3: Business Highlights
BUSINESS HIGHLIGHTS Steve Collar, SES CEO
Slide 4: Highlights
Highlights SOLID 2019 FINANCIAL AND OPERATIONAL PERFORMANCE Group EBITDA and net debt to EBITDA delivered in line with SES’ financial outlook and consistent with commitment to Investment Grade SES Networks revenue growing in line with expectations. Strong progress made ahead of O3b mPOWER launch
Slide 5: Solid 2019 Financial Performance
Solid 2019 Financial Performance EUR million 2018 2019 Change FX rate EUR 1 = USD 1.18 FX rate EUR 1 = USD 1.12 (YOY) Revenue 2,010.3 1,983.9 -1.3% (-3.8% at constant FX) EBITDA 1,255.5 1,216.6 -3.1% (-5.5% at constant FX) Operating profit 391.1 365.4 -6.6% (-7.6% at constant FX) Net Profit 292.4 29
Slide 6: Networks, EBITDA, Leverage and CapEx In Line With Financial Outlook
Networks, EBITDA, Leverage and CapEx In Line With Financial Outlook EUR million 2019 Financial Outlook 2019 Actual (assuming EUR 1 = USD 1.15) (restated at EUR 1 = USD 1.15) Video Revenue 1,225 - 1,255 1,208 Networks Revenue 740 - 775 745 EBITDA(1) 1,220 - 1,265 1,223 Net debt to EBITDA At or below
Slide 7: FCC's Landmark C-Band Decision Delivers Win-Win-Win Outcome
FCC’s Landmark C-Band Decision Delivers Objective of Win-Win-Win Outcome Clears spectrum quickly Accelerates GDP Protects current TV and Addresses rural U.S. to enable U.S. 5G growth and 5G radio broadcasts to 120 needs for quality TV and leadership innovation million homes broadband C-Band Report
Slide 8: Simplify & Amplify
SIMPLIFY & AMPLIFY CREATE PURE-PLAY FOCUS ON CORE VERTICALS STRENGTHS SIMPLIFY INNOVATE OPERATIONS FOR THE FUTURE 8
Slide 9: SES Video
SES VIDEO Ferdinand Kayser, SES Video CEO
Slide 10: Sharpening Focus to Maximise Benefit of Industry-leading Neighbourhoods and Reach
Sharpening Focus to Maximise Benefit of Industry-leading Neighbourhoods and Reach SES Video revenue 2019 Video revenue slightly below financial outlook due to EUR million -8.5% (-7.8% underlying) one important contract that did not close 1,326.0 14.3 1,213.4 3.4 Expanding the reach of SES’ video
Slide 11: Enhancing Customer Experience and Driving Customer Success Everywhere
Enhancing Customer Experience and Driving Customer Success Everywhere DARING TO BRINGING CONTENT DREAM TO LIFE “EBU entrusted MX1 to take “Not only will customers enjoy a care of the global distribution of crystal-clear picture for sports, the three Eurovision 2019 live shows and movies, but also wi
Slide 12: Core Neighbourhoods Creating Value Amidst Major Shifts in Media Consumption
Core Neighbourhoods Creating Value Amidst Major Shifts in Media Consumption Video Distribution revenue walk Underlying revenue -7.9% (YOY at constant FX) EUR million • North America decreased primarily due to lower U.S. wholesale 998.7 revenue from single customer and ongoing SD TV switch off (78.
Slide 13: Evolving Services Portfolio to Deliver Enhanced Customer Experience and Value
Evolving Services Portfolio to Deliver Enhanced Customer Experience and Value Video Services revenue walk Underlying revenue -7.2% (YOY at constant FX) EUR million • HD+ lower as business shifts towards software-driven approach 327.3 resulting in lower hardware sales (23.7) n/a 303.6 • Panasonic a
Slide 14: SES Networks
SES NETWORKS JP Hemingway, SES Networks CEO
Slide 15: Second Year of Strong Growth Underpinning Networks as the Growth Engine
Second Year of Strong Growth Underpinning Networks as the Growth Engine for SES SES Networks revenue 2019 Networks revenue in line with financial outlook EUR million +4.7% (+4.5% underlying) • 21% absolute growth in underlying revenue in the last 2 years 762.0 27.9 727.6 25.2 Re-defining connect
Slide 16: Enhancing Customer Experience and Driving Customer Success Everywhere
Enhancing Customer Experience and Driving Customer Success Everywhere AT HOME AND THE OFFICE EMPOWERING NEXT-GEN CONNECTIVITY IN THE AIR PASSENGER EXPERIENCES “Our agreements with SES secure “MedallionNet has significantly scalable bandwidth necessary for elevated the cruise experience Gogo 2Ku to c
Slide 17: Expanding Both U.S. and Global Government Services
Expanding Both U.S. and Global Government Services Government revenue walk Underlying revenue +4.9% (YOY at constant FX) EUR million +13.5 • Growing U.S. Government revenue with new and expanded MEO- enabled network solutions in addition to GEO projects (5.2) 294.6 286.3 • Global Government portfo
Slide 18: Building Commercial Pipeline to Support Telco, MNO and Cloud Network Extension
Building Commercial Pipeline to Support Telco, MNO and Cloud Network Extension Fixed Data revenue walk Underlying revenue -4.2% (YOY at constant FX) EUR million • YOY comparison impacted by exceptionally strong Q4 2018 +2.2 267.9 (10.5) 259.6 • Lower revenue from wholesale capacity contracts in Eu
Slide 19: Double-digit Growth in Aero and Maritime Driving Another Strong Year For Mobility
Double-digit Growth in Aero and Maritime Driving Another Strong Year For Mobility Mobility revenue walk Underlying revenue +16.6% (YOY at constant FX) EUR million • Strong growth in Aero reflected the continuing expansion of +28.7 solutions supporting service provider partners to meet connectivity
Slide 20: Financial Review
FINANCIAL REVIEW Adrien Bull, Head of Financial Operations 20
Slide 21: 2019 Financial Highlights (1/2)
2019 Financial Highlights (1/2) Revenue of EUR 1,983.9 million (-1.3% as reported and -3.8% at constant FX compared with 2018) • Second successive year of growth in SES Networks, underlying(1) up 4.5% YOY and double digit growth in Mobility segment (+16.6%) EBITDA of EUR 1,216.6 million (-3.1% a
Slide 22: 2019 Financial Highlights (2/2)
2019 Financial Highlights (2/2) Net debt to EBITDA ratio of 3.22x, compared with 3.29x at 31 December 2018, including 5.8% net debt reduction • In June 2019, completed renewal of the group’s EUR 1.2 billion Committed Revolving Credit Facility • In October 2019, successfully priced new 8-year EUR 5
Slide 23: Revenue Driven By Second Successive Year of Networks With Reduction in Video
Revenue Driven By Second Successive Year of Networks With Reduction in Video Revenue walk EUR million 51.8 Group revenue of EUR 1,983.9 million down 1.3% as reported (-3.8% YOY at constant FX) Second successive year of underlying(1) Networks growth (+4.5%), offset by lower underlying(1) Video (-
Slide 24: EBITDA Development Reflects Strong Focus on Discretionary Spending
EBITDA Development Reflects Strong Focus on Discretionary Spending EBITDA walk EUR million 31.3 EBITDA EBITDA EBITDA EBITDA EBITDA margin margin Margin margin margin 63.1% 62.5% 63.0% 61.3% 62.4% Operating expenses 2.3% lower than 2018 (at constant FX) reflecting strong control over cost and discr
Slide 25: Net Profit of EUR 296.2 million Representing an Increase of 1.3%
Net Profit of EUR 296.2 million Representing an Increase of 1.3% EUR million 2018 2019 EBITDA 1,255.5 1,216.6 - EBITDA margin 62.5% 61.3% Includes EUR 96.8 million impairment expenses mainly relating to MX1 and Depreciation & Amortisation(1) (864.4) (851.2) reflecting SES’ more prudent financial out
Slide 26: Strong Cash Generation Profile
Strong Cash Generation Profile EUR million 2018 2019 Net cash generated by operating activities 1,191.3 1,134.1 - Cash conversion ratio(1) 94.9% 93.2% Net cash absorbed by investing activities (320.8) (307.8) Free Cash Flow (FCF) Before Financing Activities 870.5 826.3 - FCF before financing as a %
Slide 27: Reducing CapEx Intensity While Differentiated Investments Drive Future Growth
Reducing CapEx Intensity While Differentiated Investments Drive Future Growth Capital Expenditure (growth and replacement)(1) EUR million (excluding any impact from C-Band) 1,350 130 O3b mPOWER and SES-17 1,220 450 450 Average of EUR 500 million (2018-2024) 321 308 360 250 20 350 430 340 230 100 20
Slide 28: Leverage Development In Line With Investment Grade Commitment
Leverage Development In Line With Investment Grade Commitment Net debt to EBITDA ratio Times(1) 3.41 3.53 3.43 3.50 3.47 3.29 3.40 3.22 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net debt reduced by 5.8% (YOY) to EUR 3,273 million representing net debt to EBITDA ratio of 3.22
Slide 29: FY 2020 Financial Outlook
FY 2020 Financial Outlook Financial outlook assumes EUR/USD FX rate of EUR 1 = USD 1.15, nominal launch schedule and satellite health status Between EUR 1,920 million and EUR 2,000 million(1) (from EUR 2,060 - 2,160 million) Revenue ▲ Video between EUR 1,110 million and EUR 1,150 million (from EUR 1
Slide 30: Simplify & Amplify
SIMPLIFY & AMPLIFY Steve Collar, SES CEO
Slide 31: Our Purpose and Ambitions Are Clear
Our Purpose and Ambitions Are Clear WE DO THE EXTRAORDINARY IN SPACE TO DELIVER AMAZING EXPERIENCES EVERYWHERE ON EARTH We believe in content and connectivity everywhere We provide cloud-enabled, satellite-based, intelligent connectivity We are future-proof, powered by sustainable growth and i
Slide 32: Strengthening Positioning and Flexibility Within a Rapidly Evolving Market Environment
Strengthening Positioning and Flexibility Within a Rapidly Evolving Market Environment VIDEO: linear broadcast is entrenched and profitable but powerful market NETWORKS: growing demand and increasing competition means clear forces are driving rapid change and the pace is accelerating strategy, scale
Slide 33: Positioning SES For Future Growth and Delivering Maximum Value
Positioning SES For Future Growth and Delivering Maximum Value SIMPLIFY AMPLIFY | Next phase of SES’ strategic transformation CREATE PURE-PLAY FOCUS ON SIMPLIFY INNOVATE FOR MARKET VERTICALS CORE STRENGTHS OPERATIONS THE FUTURE Explore creation of two pure-play market verticals Double-down on what w
Slide 34: Leader in Global Content Connectivity Solutions
LEADER IN GLOBAL CONTENT CONNECTIVITY SOLUTIONS Solid financial performance with EBITDA and leverage in line with expectations for the second consecutive year Networks delivering on the growth potential and focusing on seamless, cloud-scale intelligent connectivity Sharpening focus on cash gen
Slide 35: 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
Slide 36: Investor Relations contacts
Richard Whiteing Anja Siehler Michelle Suc Investor Relations Investor Relations Investor Relations Richard.Whiteing@ses.com Anja.Siehler@ses.com Michelle.Suc@ses.com T +352 710 725 261 T +352 710 725 8279 T +352 710 725 403 M +352 691 898 956 M +352 691 798 069 Connect with us 36