Eutelsat Communications SA · EURONEXT:ETL
Eutelsat Communications SA — Q1 2019-20 Earnings Presentation
25 slides from Eutelsat Communications SA's earnings presentation, Oct 30, 2019
Slide 1: First Quarter 2019-20 Revenues
FIRST QUARTER 2019-20 REVENUES 30 October 2019
Slide 2: Agenda
Agenda 1 Key Events 2 Q1 2019-20 Performance 3 Outlook 2
Slide 3: Key Events
Key Events Positive outcome of Fall 2019 renewal campaign with USG: 90% renewal rate LEAP 2 cost-savings program underway, aiming to generate opex savings of €20m-€25m by FY22 Procurement of E10B satellite with significant firm pre-commitments, highlighting robust demand in Mobility markets Progress
Slide 4: Agenda
Agenda 1 Key Events 2 Q1 2019-20 performance 3 Outlook 4
Slide 5: Q1 Revenues
Q1 Revenues Q1 YOY REVENUE BRIDGE (€M) ► Revenues down 5.2% reported ► Slightly negative perimeter impact -6.2% • Carry-forward of deconsolidation of 5 Eutelsat 25B in August 2018 (2) (0) ► Positive currency effect • •€/$ rate of 1.12 vs 1.16 last year (20) 335 ► Operating verticals down 6.2% 318 li
Slide 6: Q1 Revenues like-for-like by application
Q1 Revenues like-for-like by application REVENUE REVENUES LIKE-FOR-LIKE2 CONTRIBUTION1 (€m) CHANGE Broadcast 62% 195 -1.7% Data & Professional 14% 10% 43 -19.6% Video Government 12% 39 -10.7% Services Fixed 6% 20 -3.3% Broadband Mobile 6% 20 -7.8% Connectivity Total Operating Verticals 317 -6.2% Oth
Slide 7: Broadcast
Broadcast REVENUES (€M) ► Revenues of €195m, down 1.7% y-o-y like-for-like1 • Temporary effect of return of a couple of transponders in Russia • Termination of a contract in SSA 791 ► 6,976 channels at end-Sept. 2019 Q4 198 • -0.3% y-o-y • HD up from 20.3% to 22.7% Q3 198 ► Two multi-year, multi-tra
Slide 8: Channel count
Channel count Channel count reflecting one-off in Africa and end of dual illumination/simulcast Sustained HD ramp-up 6,999 +152 6,976 +11% 1,582 1,419 -95 -80 20% 23% Penetration Sept. 2018 One-off End of Other Sept. 2019 Sept. 2018 Sept. 2019 in SSA double illumination/ simulcast MPEG-4 more advanc
Slide 9: Data & Professional Video
Data & Professional Video REVENUES (€M) ► Revenues of €43m, down 19.6% y-o-y like-for-like1 ► Continuing to reflect: 200 • Highly competitive environment • Ongoing pricing pressure Q4 49 ► Volume losses in Data Q3 48 ► Lower occasional use in Q2 51 Professional Video ► Comparison basis to ease in H2
Slide 10: Government Services
Government Services REVENUES (€M) ► Revenues of €39m, down 10.7% y-o-y like-for-like1 • Carry forward effect of Fall 2018 USG renewal campaign 162 ► USG renewal rate of c.90% in value 40 Q4 in Fall round Q3 40 ► Contribution of EGNOS in the second half subject to availability of the payload Q2 39 Q1
Slide 11: Fixed Broadband
Fixed Broadband REVENUES (€M) ► Revenues of €20m, down 3.3% y-o-y like-for-like1 ► Revenue trends improving in 80 Europe • Continued progression of PPP Q4 21 program • Extension to new countries underway Q3 19 ► Modest contribution from African Q2 20 Broadband at this stage • Expected to ramp up thr
Slide 12: Mobile Connectivity
Mobile Connectivity REVENUES (€M) ► Revenues of €20m, down 7.8% y-o-y like-for-like1 • Negative one-off of circa €1m to be caught up in Q2 • Carry-forward of the end of a temporary 80 wide-beam contract on EUTELSAT 172B in FY 19 21 Q4 • Contribution of contract with UnicomAirNet from January 19 Q3 2
Slide 13: Backlog and Fill Rate
Backlog and Fill Rate BACKLOG (€BN) OPERATIONAL AND LEASED TRANSPONDERS 1,416 1,387 1,387 4.7 4.4 4.2 976 960 966 % 77% 75% 75% Video 30 September 30 June 2019 30 September 30 Sept. 2018 30 June 2019 30 Sept. 2019 2018 2019 Fill 69.0% 69.2% 69.7% rate Operational transponders leased transponders ► 3
Slide 14: Agenda
Agenda 1 Key Events 2 Q1 2019-20 performance 3 Outlook 14
Slide 15: Reminder: Our strategic roadmap
Reminder: Our strategic roadmap Step 1 Step 2: return to growth GROW TOPLINE MAXIMIZE EXTRACT VALUE CAPTURE THE FREE CASH-FLOW FROM THE CONNECTIVITY GENERATION BROADCAST OPPORTUNITY BUSINESS 15
Slide 16: Launch of 'LEAP 2' cost savings program
Launch of ‘LEAP 2’ cost savings program ► Objective of €20 to 25m savings by FY 22 confirmed ► Multiple measures addressing mainly staff costs • Reduction of c.100 in headcount outside of France • Global hiring freeze in the legacy businesses • Austerity measures within France o Including a global c
Slide 17: Seizing mobility opportunity with EUTELSAT 10B procurement
Seizing mobility opportunity with EUTELSAT 10B procurement MULTI-PAYLOAD SATELLITE COMBINING MATERIAL GROWTH OPPORTUNITY IN MOBILITY COMPLEMENTARY MISSIONS AT COMPETITIVE COST ► Strategically located with unmatched ► Continuity for customers on coverage EUTELSAT 10A • Regular capacity reduced by 60%
Slide 18: Testing market traction in IoT to add a future growth lever to Connectivity
Testing market traction in IoT to add a future growth lever to Connectivity SIGNIFICANT MARKET ELO: AN UNMATCHED VALUE COMPELLING RISK / RETURN OPPORTUNITY PROPOSITION PROFILE ► Strong growth in demand ► Nano-satellite constellation ► Fully scalable • Connected objects to offering global coverage •
Slide 19: FY outlook: Revenue trends to improve in coming quarters
FY 20 outlook: Revenue trends to improve in coming quarters EASING COMPS IN GOVERNEMENT SEVERAL TAILWINDS TO SERVICES AND DATA & PV SUPPORT H2 PERFORMANCE FY 19 quarterly revenues at 1.14 €/$ rate 335 328 324 326 ► Incremental capacity on ETL 7C 21 20 20 20 in SSA 20 20 19 21 43 40 40 39 ► Ramp-up o
Slide 20: EUTELSAT 5 West B status
EUTELSAT 5 West B status ► Investigating incident on one of the two solar arrays ► Assessment of the potential impact on the performance ► Satellite mission consisting of • E5WA replacement • EGNOS payload ► Main customers at 5°W include French and Italian DTT and Fransat • c. €30m of revenues gener
Slide 21: Financial outlook confirmed based on nominal deployment plan
Financial outlook confirmed based on nominal deployment plan OPERATING VERTICALS REVENUES1 ► FY 2019-20: between €1,280m and €1,320m ► FY 2019-20 to FY 2021-22: average of CASH CAPEX €400m2 per year DISCRETIONARY FREE CASH FLOW3 ► FY 2021-22: around €500m ► Maintain investment grade rating LEVERAGE
Slide 22: To sum up
To sum up No change to our mid-term view on Broadcast as a fundamentally resilient business Full year revenue objectives confirmed, but with increased likelihood of landing in lower half of the range All other elements of our financial objectives also confirmed Ongoing focus on cash-generation lever
Slide 23: Appendix
APPENDIX
Slide 24: Future launches
Future launches KONNECT KONNECT EUTELSAT EUTELSAT EUTELSAT Name VHTS HOTBIRD 13F HOTBIRD 13G 10B Orbital TBD TBD TBD 13° East 13° East 10° East Position Launch date1 Q1 2020 Q3 2020 H2 2021 H2 2021 H2 2021 2022 Manufacturer Launcher TBD TBD TBD TBD SSA Flexible Europe Europe Europe EMEA, Atlantic Co
Slide 25: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as any offer for sale of or solicitation of any offer to buy any securities of Eutelsat Communications, nor should it, or any part of it, form the basis of or be relied on in connection with any contract or
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