Corporate Presentation Inmarsat plc VSAT Space Segment $145m (8%) Energy VSAT Space Segment $168m...
Transcript of Corporate Presentation Inmarsat plc VSAT Space Segment $145m (8%) Energy VSAT Space Segment $168m...
Business Overview
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Market leader in MSS today moving into VSAT markets
! Market leader
! Global coverage, L-‐band ! Mission cri6cal customer needs
! EBITDA margin 70%
! Entering established markets
! Global coverage, Ka-‐band ! Future proof exis6ng business ! Fully-‐funded plan
Strong core business and investment in new growth
Mobile Satellite Services (MSS)
VSAT ‘Global Xpress’ Services
Today: Tomorrow:
MSS markets ! 57% of MSS revenue
! 190,000 subscribers ! Drivers: Ship management
Automa6on cost savings
Crew welfare / access
Smaller vessel adop6on
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Land Mobile
Aviation
Maritime
! 17% of MSS revenue
! 172,000 subscribers ! ~60% government business
! Drivers: Military special ops
Interna6onal aid agencies
Media: on-‐the-‐spot repor6ng
! 15% of MSS revenue
! 17,000 subscribers ! ~60% government business
! Drivers: Military, VIP aircraV
Business jets
In-‐flight passenger connec6vity
! Market leader in all sectors
! Mission cri<cal remote connec<vity
! Safety services ! Global coverage ! Strong subscriber growth ! Spare satellite in orbit ! Satellite life<mes to 2023
! Wholesale EBITDA margin ~70%
! Limited compe<<on
(1) Based on 2013 MSS revenue reported for Inmarsat Global
(1)
High barriers to entry
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Scale needed to build a global network and fund replacement satellites Capital
Uniform global spectrums rights now extremely challenging to secure and retain Spectrum Rights
Distribu6on rela6onships with over 600 organisa6ons, providing essen6al global reach Distribu<on
Orbital loca6ons can take years to secure and may not be available Orbital Slots
Inmarsat has established market access over 33 years of opera6ons Licensing
33 years technical excellence and provision of global safety services Reputa<on
Multiple challenges for any new entrant
At least 6 years for a new competitor to enter the market
Network and route to market
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Established model for existing and future services
Inmarsat
Government Inmarsat Mari<me
Inmarsat Enterprise
Inmarsat-‐4 satellites Inmarsat-‐5 satellites
Inmarsat Solu<ons
Inmarsat Global
MSS services
VSAT services
Satellite Network
Services PorXolio
Direct Channel partners
Life<mes to 2023 Life<mes to 2028
Direct and Indirect
Distribu<on
Customer Markets
Direct Direct Channel partners
Channel partners
High-quality end customer base
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Enterprise Maritime
Supplying mission-critical applications to a diverse end user base
Government / Military International Aid
Global coverage
2014
$1.9bn market
size
50 MB/s
$1.6bn cost
3 satellites Ka-band
Global Xpress overview
! Global coverage complete in 2014
! Future proof global MSS franchise
! Expansion of ac<vi<es into established, growing adjacent VSAT markets
! $1.9bn established market opportunity
! Significant capacity pre-‐commitments
! 30% of cumula<ve 5-‐year plan revenues secured
! Distribu<on agreements signed
! $700m of financing from Ex-‐Im Bank
! Total cost $1.6bn including spare satellite
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World’s first global mobile VSAT service
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Our Strategy Operational progress matched by commercial readiness
! L-band growth via Inmarsat-4, Alphasat & Inmarsat-6
! Further growth & diversity via Inmarsat-5 & GX
Safety and redundancy
Capacity and speed
Solutions Ecosystem - driving value-adds for end users
Inmarsat 4 & 6
Core L-band services Highly mobile, agile and resilient
Inmarsat 5
Core Ka-band services High capacity, high speed
! Empower a high-value solutions ecosystem centred on Inmarsat
! Reorganised for proximity, agility & efficiency
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Business unit structure provides strategy implementation on a market-by-market basis
Maritime VSAT Space
Segment $145m (8%)
Energy VSAT Space
Segment $168m (9%)
Enterprise Consumer
Retail Other
Segments $944m (50%)
US DoD, ROW Gov't commercial
FSS $643m (34%)
VSAT wholesale satellite capacity purchases
2010 - $1.9bn* Maritime
VSAT Space Segment $135m (10%) Energy
VSAT Space Segment $152m (11%)
Enterprise Consumer
Retail Other Segments
$576m (42%)
US DoD, ROW Gov't, commercial FSS $502m
(37%)
2008 - $1.4bn*
Global Xpress market opportunity
2008 to 2010 CAGR • Mari6me ~4% • Energy ~5% • Government ~13%
VSAT wholesale satellite capacity purchases
* $1.4bn for 2008 and $1.9bn for 2010 represent the total VSAT wholesale satellite capacity purchases for the year indicated. These es6mates are based on the Comsys VSAT Report (11th and 12th edi6ons, respec6vely), taking total Service Revenue ($5.4bn and $7.3bn, respec6vely) adjusted for managements’ es6mates of hardware revenue, retail mark-‐up and value added services.
Historical growth rates • Mari6me ~22% • Energy ~9% • Government ~7%
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Adjacent established markets with growth
Further growth options
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! High growth market opportunity >$250m ! Strategic partnerships with SkyWave and ORBCOMM
! Suited to L-‐band network ! Compe<tor market share opportunity ! Significant product development completed
M2M Services
Further growth options
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GX Avia<on will provide speeds of up to 49 Mbps to aircraf, which has the poten<al to support live feeds from the internet, innova<ve applica<ons for the crew and passengers and offers airlines a future-‐proof op<on with broadband capacity for growth ! 400% increase in connected aircraf expected in the next decade
! New global services enable a whole new genera<on of affordable equipment.
! Upcoming launch of SwifBroadband HDR; higher rate communica<ons to or from the aircraf
! Upcoming enhancements include SBB for helicopters and approved Safety Services using SBB
In-flight Connectivity
Financial overview
! Highly cash genera<ve core business with growth ! Largely fixed opera<ng costs ! ~70% core EBITDA margin
! Fully-‐funded investment programme
! Modest leverage at peak of investment cycle
! Long-‐term dividend policy in place
! Eight year history of dividend growth
Free cash flow expansion follows investment phase
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Net debt at 31 December 2013
! Fully-‐funded business plan ! $1.05bn of available liquidity • $750m undrawn bank facility
• $144m cash on hand
• $156m Ex-‐Im Facility available
! $700m of 12.5-‐year Ex-‐Im debt at 3.1% for life
! Senior debt rated BBB ! Junior debt BB+/Ba2
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-200
300
800
1,300
1,800
EIB Facility 2018
Ex-Im Bank 2023
Senior Notes Due 2017
Cash
Convertible Bond 2017
US$m
$850
$544
-$144
$1,799
$329
$220
Net debt Fully funded, low leverage, attractive long-term debt
/ / Group leverage: Net Debt / LTM EBITDA = 2.8x
316 332384
432495
556 530 545 562
491 500557
635695
747 755 776 795
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2005 2006 2007 2008 2009 2010 2011 2012 2013EB
ITDA
Reve
nues
Maritime Land Aviation
Leasing Other EBITDA
Revenue CAGR: 6.2%
Inmarsat Global record of growth Historical revenue and EBITDA growth
(64%)
(68%)
(66%) (69%)
(71%)
Sector CAGR
2005–2013
Maritime 6%
Land Mobile 1%
Aviation 22%
Leasing 4%
Revenue growth by sector
($ in millions) ($ in millions)
Notes: Other Income excludes revenue from LightSquared. ( ) denotes EBITDA / revenue margin (excluding LightSquared).
(74%) (70%)
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(71%)
(70%)
Maritime market overview
! Commercial mari<me market • Represents 75,421 vessels
• Total addressable market today 20,000 vessels
• Only 5,247 have VSAT installed today
! Other poten<al mari<me markets • Fishing: 32,669 vessels
• Inland: 18,033 vessels
• Leisure: 1,028,000 vessels
* Source: Comsys Report, 3rd Edition, 2012
1,071 5,020
11,749
30,717
14,295
7,505
5,064
Commercial Ships by Type*
Passenger
Container
Miscellaneous
Bulk/Dry Cargo
Tankers
O & G Maritime
Pass / Cargo
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Maritime market can grow in MSS and VSAT
XpressLink take-up
! Significant fleets commipng to XpressLink ! Mul<-‐year agreements – five years standard ! >800 installa<ons ! Total installed VSAT base 1,478 ships (XL and legacy VSAT) • Revenue > $70m pa, EBITDA margin 15-‐20% • Significant and growing margin expansion opportunity
! Acquisi<on of Globe Wireless to increase XL installa<on capability • Adds established Value Added Services capability
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XpressLink is a market-leading Maritime VSAT service
IsatPhone Pro
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Cumulative net adds since 2011*
* Based on change in billable commercial voice subscribers for each quarter end as reported in Iridium SEC filings on form 10-Q/10-K for the applicable period. Active IsatPhone Pro subscribers for Inmarsat.
! IsatPhone Pro >86,000 ac<ve subscribers ! >10% market share by units ! IsatPhone outselling market leader ! Reignited growth in land voice revenue afer years of decline
Taking market share from competitors
IsatPhone 2 ISatPhone Pro
FY 2013 MSS revenue breakdown by sector FY 2013 revenue breakdown by type
2013 revenue breakdown
FY 2013 revenue by business line
Aviation 15%
Leasing 11%
Maritime 57%
Land 17%
Leasing 11%
Data 76%
Voice 13%
Inmarsat Global
Inmarsat Solutions
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Broadband & Other MSS 50%
Inmarsat MSS 50%