Eutelsat Communications SA · EURONEXT:ETL
Eutelsat Communications SA — Investor Presentation (November 2006)
41 slides from Eutelsat Communications SA's investor presentation, November 2006
Slide 1: Investors Presentation
Eutelsat Communications Investors Presentation November 2006 NOVEMBER 2006 November 2006 1
Slide 2: 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
Slide 3: Strategy Reflected in Strong Results
2005-2006: Strategy Reflected in Strong Results Expansion Across All Activities Improvement of All Key Indicators Reflecting Financial Strength Strategy Maintained: Combining Growth, Visibility and Profitability NOVEMBER 2006 November 2006 3
Slide 4: Eutelsat – A Continuous Organic Growth Story
Eutelsat – A Continuous Organic Growth Story > Since 1990, Eutelsat’s revenue has grown by c. 700%, only through organic growth > 2005-2006 revenues: +5.4% at 791 M€ (+4.6% excluding non-recurring revenue) 800 Hot Bird TM 7A 10 satellites Hot Bird TM 8 700 launched since SESAT 2 W3A transformation H
Slide 5: Leading European Operator of Fixed Satellite Services
Eutelsat Communications in 2005-2006: Leading European Operator of Fixed Satellite Services Balanced portfolio of activities ► World’s third largest operator of Fixed Revenue by Segment (June 30, 2006) Satellite Services, with 13% market share 1 Others ► Revenue growth: +5.4% at 791.1 M€ 3% (+4.6% e
Slide 6: The Most Profitable Operator of Fixed Satellite Services
Eutelsat Communications in 2005-2006: The Most Profitable Operator of Fixed Satellite Services High Proportion of Video Services Highest EBITDA Margin1 77.9% 80% 67% 65% 73% 70.3% 68% 18% SES Global Eutelsat Panamsat Intelsat Intelsat SES Global Panamsat Eutelsat 1 Source: SES Global H1 2006 – full
Slide 7: 2005-2006: Strategy Reflected in Strong Results
2005-2006: Strategy Reflected in Strong Results Strategic Directions 2005-2006 Achievements Continue expansion of premium positions in + 16.7% growth in TV channels (176 new TV European Union countries (HOT BIRD TM at 13° channels) at premium orbital positions. Successful East, EUROBIRDTM 1 at 28.5
Slide 8: Further develop valuable Portfolio of Orbital Positions
Further develop valuable Portfolio of Orbital Positions 23 satellites covering 90% of the world population Premium video positions HB10 Major video positions HB9 Multi-purpose positions HB8 HB7A Satellites under procurement EB10 HB6 W4 AB2 TELSTAR Exp HB2 12 AB1 A3 AB4 AB3 W3A W1 W2 W6 EB2 EB1 EB3 S
Slide 9: Improvement of All Key Performance Indicators
2005-2006: Improvement of All Key Performance Indicators REVENUES in M€ EBITDA in M€ EBITDA margin: 77,9 % (1) +5.4% +6.5% 616,5 791.1 750.4 578,5 June 30, 2005 pro forma June 30, 2006 June 30, 2005 pro forma June 30, 2006 (1) incl.17.4 M€ of non-recurring revenues ORDER BACKLOG in bn€ FILL RATE (%)
Slide 10: Develop Business on Two continents
Develop Business on Two continents: Western Europe and from Russia to Africa via Middle-East 1 > Consolidating Video neighbourhoods European Union > Data & VAS focused on institutional and corporate users > New TV channels and platforms 2 Emerging Markets > Development of Data & Value-Added Services
Slide 11: 2005-2006 Key Strategic Achievements
2005-2006 Key Strategic Achievements > Continuous growth in number of TV channels (+409) 4 1 Video > Development of Video services in our “Second Continent” Emerging Markets > Deployment of VAS: key accounts > Central Europe Data and of corporate and institutional markets in > Eastern Europe, 2 Valu
Slide 12: Expansion Across All Activities
2005-2006: Strategy Reflected in Strong Results Expansion Across All Activities Improvement of All Key Indicators Reflecting Financial Strength Strategy Maintained: Combining Growth, Visibility and Profitability NOVEMBER 2006 November 2006 12
Slide 13: Revenue Growth Across All Applications
Revenue Growth Across All Applications FY 2004-2005 In M€ Pro forma FY 2005-2006 % Growth Key highlights unaudited Solid growth of Video Services 511.3 528.6 + 3.4 % Broadcasting Robust performance of Data & VAS 161.7 169.1 + 4.6 % VAS Multi-usage 60.8 69.7 + 14.5 % Contract renewals Other revenues
Slide 14: VIDEO: +409 TV channels during FY 2005-2006
VIDEO : + 409 TV channels during FY 2005-2006 > More than 2 100 TV Channels across the fleet (of which only 11 TV in analog) > 13°E is the N°1 orbital position with more than 970 TV channels broadcasted (June 06) Video orbital positions Eutelsat competitors orbital position 12 HD TV channels as of J
Slide 15: 409 New TV Channels
409 New TV Channels Number of TV channels As of June 30, 2005 As of June 30, 2006 Growth % Change at orbital positions ( channels) Premium video positions 1,051 1,227 + 176 + 16.7 % Non-premium major video 544 750 + 206 + 37.9 % position Other positions 117 144 + 27 + 23.1 % TOTAL 1,712 2,121 + 409
Slide 16: Strong Growth in Value-Added Services
Strong Growth in Value-Added Services Solid momentum in VAS D-STAR deployment driven by Africa and Europe +4.6% 169.1M€ Europe: Europe: 2,483 2,483 161.7 M€ (+881) (+881) Russia: Russia: 66 66 +1.4% (+5) (+5) Middle Middle East East && Central Central Asia Asia +22.4% South South America: America: 3
Slide 17: New Growth Opportunities in Services and Applications
New Growth Opportunities in Services and Applications Electronic Cinema Future Video/Radio to Broadband Future Mobile Applications Applications Further Upside Hybrid Satellite/ Train Broadband Pilot Terrestrial Applications Business Jet Applications Broadband being tested Maritime applications (TV,
Slide 18: Improvement of All Key Indicators Reflecting Financial Strength
2005-2006: Strategy Reflected in Strong Results Expansion Across All Activities Improvement of All Key Indicators Reflecting Financial Strength Strategy Maintained: Combining Growth, Visibility and Profitability NOVEMBER 2006 November 2006 18
Slide 19: Key Indicators above Objectives
Key Indicators above Objectives FY 2004-2005 IFRS – in M€ Pro forma FY 2005-20061 Change % Key highlights Unaudited Revenue 750.4 791.1 + 5.4 % OPEX (171.9) (174.6) + 1.6 % Stable operating expenses, SG&A EBITDA2 578.5 616.5 + 6.6 % EBITDA margin 77.1 % 77.9 % + 0.8 pt Net result (44.9) 40.2 Launch
Slide 20: Positive Net Result In spite of Debt Restructuring Costs
Positive Net Result In spite of Debt Restructuring Costs and Satellite Impairment Charge Condensed income FY 2004-2005 statement Pro forma FY 2005-2006 Change % Key highlights IFRS – in M€ Unaudited Revenue 750.4 791.1 + 5.4 % Operating expenses (171.9) (174.6) +1.6 % SG&A stable: tight cost control
Slide 21: Financial Result Impacted by Debt Restructuring Costs
Financial Result Impacted by 45 M€ of Debt Restructuring Costs FY 2004-2005 IFRS – in M€ Pro forma FY 2005-2006 Unaudited Interest expenses and others (173.9) (138.1) Hedging instruments (15.4) 10.7 Foreign exchange gains / losses 0.0 0.5 Amortisation of loan set-up fees (9.1) (8.2) Sub-Total (198.4
Slide 22: Structurally High Operating Free Cash Flow
Structurally High Operating Free Cash Flow Condensed cash flow statement FY 2005-2006 IFRS – in M€ Net cash flows from operating activities 501 63% of revenue Capital expenditure (231) Operating free cash flow 269 34% of revenue Minority buy-outs (67) Net IPO proceeds 839 Dividend to minority shareh
Slide 23: Improvement of debt profile & leverage ratio
Improvement of debt profile & leverage ratio 3,157 M€ 2,228 M€ Blended margin: Euribor 292 bp Blended margin: (32) (929) Euribor +91 bp 825 bp 300 (264) 425 bp 475 Cash PIK loan facility 100 bp 255 bp 1 468 +147 1 615 Second Lien facility Senior debt Eutelsat SA credit facilities 83* bp (69) 75* bp
Slide 24: Q1 2006/07: Turnover growth by 6% to 199.5M€
Q1 2006/07: Turnover growth by 6% to 199.5M€ • Strengthening of HOT BIRD™ orbital position with the launch of HOT Significant increase of Video BIRD™ 8 at 13oE (august 2006) service : - Deployment of ATLANTIC BIRD™ 4 (+15 Tpx) for Middle East coverage + 13,8 M€ @142,8 M€ - Reallocation of capacity f
Slide 25: Q1 2006/07: Implementation of investment plan
Q1 2006/07 : Implementation of investment plan Reinforcement of HOT BIRDTM premium position - Anticipated procurement of HOT BIRDTM 10 satellite @ 13o Est - Deployment of ATLANTIC BIRDTM 4 to 7o/8o W Development of new major orbital slots - Procurement of W7 in course to replace SESAT 1 and increase
Slide 26: FY 2006-2007 and Mid-Term Objectives
FY 2006- 2007 and Mid-Term Objectives - Above 800 M€ in FY 2006-2007 - CAGR at +4.5% for FY 2007-2008 and FY 2009-2009 Revenue Maintain overall initial target1 of CAGR* at +4.5% for FY 2007-2008 and FY 2008-2009, based on estimate of 769 M€ for FY 2006-2006 (+ 2.5%) Objective raised to 77% for FY 20
Slide 27: Strategy Maintained: Combining Growth, Visibility and Profitability
2005-2006: Strategy Reflected in Strong Results Expansion Across All Activities Improvement of All Key Indicators Reflecting Financial Strength Strategy Maintained: Combining Growth, Visibility and Profitability NOVEMBER 2006 November 2006 27
Slide 28: Growth
Our Strategy: Combining Growth … Pursue Develop highly valuable opportunistic approach portfolio of orbital positions to Multi-usage leases Growth Develop new services Develop activities across and applications (VAS, mobiles …) our “Two continents” November 2006 28
Slide 29: Visibility and Profitability
… Visibility and Profitability Attractive return Backlog: 4bn € to shareholders at June 30, 2006 Capital expenditure: Visibility EBITDA margin 260 M€ per annum 2006-2007: 77% beyond 2009 2007-2008 & 2008-2009: > 76 % Structurally High operating free cash flow November 2006 29
Slide 30: Appendices
Appendices NOVEMBER 2006 November 2006 30
Slide 31: Multiple Growth Opportunities
Multiple Growth Opportunities Growth in TV channels Terrestrial Video Networks ► Number of TV channels expected to ► DTT development (France, Italy, …) grow from 5,500 to more than 9,000 by ► Growth of IPTV may create new 2016* opportunities for satellites for direct IPTV, feeding DSLAMs HDTV Mobile
Slide 32: Predictable and Attractive Cash Flow Generation
Predictable and Attractive Cash Flow Generation ►Strong 4 bn € backlog provides unique visibility M€ > Strong backlog: 4 bn € > More than 5 years of FY 2005-2006 648.8 570.1 528.8 2,221.7 revenues > Weighted average residual contract Breakdown of backlog 56% duration: 7.7 years by fiscal years > 85%
Slide 33: Consolidated Net Result adversely impacted by Debt Restructuring Costs
Consolidated Net Result adversely impacted by 62 M€ of Debt Restructuring Costs and Satellite Impairment Charge FY 2004-2005 IFRS – in M€ Pro forma FY 2005-2006 Unaudited Net result as reported (44.9) 40.2 Post-IPO debt restructuring costs - + 39.2 Senior debt restructuring costs (net) - + 5.3 W1 re
Slide 34: Initial Benefits of Debt Restructuring Reflected in Lower Financial Expenses
Initial Benefits of Debt Restructuring Reflected in Lower Financial Expenses IFRS – in M€ H1 2005-2006 H2 2005-2006 FY 2005-2006 Interest expenses and others (84.4) (53.7) (138.1) Hedging instruments 10.0 0.7 10.7 Foreign exchange gains / losses 0.2 0.3 0.5 Amortisation of loan set-up fees (4.6) (3.
Slide 35: Senior Debt Refinancing: First Step of Group Structure Simplification
Senior Debt Refinancing : First Step of Group Structure Simplification NEW STRUCTURE AND FINANCING BENEFITS EXPECTED FROM REFINANCING Senior Facilities Eutelsat Communications of 1,915 M€ ► IMPROVING FINANCIAL FLEXIBILITY (Margin @100 bp) > Debt raised by Eutelsat Communications to 100% SatBirds Cap
Slide 36: Post restructuring Group Debt Structure
Post restructuring Group Debt Structure Undrawn In M€ As of June As of June 30, 30, 2005 2006 As of June 30, 2006 Senior Term Loan 0 1,615 Eutelsat Communications Revolver 0 0 300 SBCP PIK Loan 300 0 Second Lien 475 0 Senior Debt 1,460 0 SatBirds Finance Revolver 8 0 SatBirds 2 SAS Cash (32) (255) T
Slide 37: Ongoing Medium-Term Hedging Strategy
Ongoing Medium-Term Hedging Strategy ► Debt facilities key features and hedging > At Eutelsat Communications level: 1 915 M€ Blended margin: Euribor + 91 bp > Bullet debt with 7 years maturity ie up to June 2013 > Up to April 2008 (Year 3) Hedged for a total of 1.7 Bn€ debt (term loan) 100 bp Co
Slide 38: FY 2005-2006 Income Tax Analysis
FY 2005-2006 Income Tax Analysis FY 2004-2005 IFRS – in M€ Pro forma FY 2005-2006 Unaudited Income tax of Eutelsat S.A. (statutory) (65.4) (92.5) ATLANTIC BIRDTM 1 deferred tax consolidation 28.9 3.9 impact Deferred tax reversal on “customer contracts 15.3 15.3 and associated relationships” amortisa
Slide 39: Settlement of ATLANTIC BIRD 1 dispute
Settlement of ATLANTIC BIRD™ 1 dispute December 19, 2005 Agreement signed with ALS to acquire ATLANTIC BIRD™ 1 satellite for a total value of 48 M€ Impacts for Eutelsat Operations Unchanged Revenues + 17.4 M€ of non-recurring revenues in Q2 2005-2006 Balance sheet Reduction of the Group’s net financ
Slide 40: Shareholder Base and Geographical Split
SHAREHOLDER BASE AND GEOGRAPHICAL SPLIT Italy2% Floating Switzerland 5% Other 5% GSCP Eurovision2000(3) Autre 33,7% Holding Sarl 6,7% 7,1% France 18% CB 3 Luxembourg Sarl(2) 11,6% Germany 8% % of capital Nebozzo Sarl(1) 15,4% UK 35% Eurazeo (1) Conjointly owned by Spectrum Affiliates 25,5% Equity In
Slide 41: Full Year 2005-2006 Results
Eutelsat Communications Full Year 2005-2006 Results September 2006 Investors Presentation NOVEMBER 2006 November 2006 41
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