Eutelsat Communications SA · EURONEXT:ETL
Eutelsat Communications SA — H1 2007-2008 Earnings Presentation
35 slides from Eutelsat Communications SA's earnings presentation, Feb 14, 2008
Slide 1: Eutelsat Communications First half 2007-2008
Eutelsat Communications First half 2007-2008 February 14, 2008 Giuliano BERRETTA Jean-Paul BRILLAUD Catherine GUILLOUARD Chief Executive Officer Deputy Chief Executive Officer Chief Financial Officer
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 or
Slide 3: First Half 2007-2008
First Half 2007-2008 1. Achievements in line with strategy 2. Robust growth and enhanced visibility 3. Further improvement in financial performance 4. Securisation, Expansion and Innovation, three pillars supporting infrastructure development Page 3 3 Assemblée Générale – 9 novembre 2007
Slide 4: Excellent performance in the first half 2007-2008
Excellent performance in the first half 2007-2008 In m€ + 3.4 % Continued revenue growth: +6.3% 415 429.4 Excluding non-recurring revenues, driven by momentum H1 2006-2007 H1 2007-2008 of TV and broadband + 1.9 pt Exceptionally high EBITDA margin at 81.3%, the 79.4% 81.3% highest among leading Fixed
Slide 5: H1 2007-2008: achievements in line with strategy
H1 2007-2008: achievements in line with strategy Strategic goal Maximise revenue per transponder Stronger video neighbourhoods Growing Value Added Services > 522 new TV channels: + 21.5% > Continuous expansion of broadband: > HOT BIRD™ leadership confirmed: + 1,100 > D-STAR : +2,413 terminals channe
Slide 6: Activity profile in the first half 2007-2008
Activity profile in the first half 2007-2008 Video Applications Prioritising Video Applications and developing a strong pole of Value Added Services • Video Applications: +10.2 % Data • Value Added Services: +13.6 % Value Added Services Multi-usage Others 74.4 Page 6 % 17.5 % 6.9 % 1.3 % 6
Slide 7: Dynamic emerging markets
Dynamic emerging markets + 47.7 % + 7.8 % + 59.2 % + 22.5 % 4,889 1,354 1,443 3,239 D-STAR TV Channels D-STAR TV Channels terminals 31/12/2007 31/12/2007 terminals 31/12/2007 31/12/2007 Growth rates compared to December 31, 2006 7
Slide 8: 2,951 TV channels: up 21.5%
2,951 TV channels at 31 Dec.2007 : up 21.5% HOT BIRD™ leadership confirmed, with more than 1,100 channels Major video neighbourhoods: 437 additional channels, driven by Russia and emerging markets EUROBIRD™ 9: successful take-up of this position co-located with HOT BIRD™ Ramp-up of HDTV with 31 chan
Slide 9: Success of EUROBIRD 9 co-located with HOT BIRD
Success of EUROBIRDTM 9 co-located with HOT BIRDTM Reception of 13o E and 9o E from a single dish EUROBIRD™ 9: broadcast satellite technically similar Target markets: thematic channels, linguistic to HOT BIRD™ satellites communities, HDTV 20 high-power transponders; 38 with redeployment of HOT BIRD™
Slide 10: First Half 2007-2008
First Half 2007-2008 1. Achievements in line with strategy 2. Robust growth and enhanced visibility 3. Further improvement in financial performance 4. Securisation, Expansion and Innovation, three pillars supporting infrastructure development 10
Slide 11: Quality of performance indicators
Quality of performance indicators Excellent visibility maintained, Leased transponders up 8.4% supported by backlog 3.8 bn € 3.6 bn € 427 Leased transponders 394 autres Others vidéo Video 91 % 92 % 82.2 % 84.6 % H1 2006-2007 H1 2007-2008 31/12/06 31/12//2007 Backlog Fill factor 11
Slide 12: Continuous revenue growth
Continuous revenue growth Evolution of revenues In m€ excluding non-recurring items 5.6 3.1 29.5 + 6.3% 29.5 81.6 75.0 319.3 289.8 HI 2006- 2007 H1 2007-2008 Video Applications Data and value added services Multi-usage Other revenues 12
Slide 13: Video Applications: nearly 75% of consolidated revenues
Video Applications: nearly 75% of consolidated revenues Momentum supported by digital television in emerging markets As a % of consolidated In m€ + 10.2% revenues 74.4% 71.7% 319.3 289.8 H1 2006-2007 H1 2006-2007 H1 2006-2007 H1 2006-2007 13
Slide 14: Value Added Services: robust growth
Value Added Services: robust growth Ongoing deployment of D-STAR broadband In m€ service > + 2,413 additional terminals over past 12 months 81.6 75.0 Partnership with Orange, Alstom, Cap Gemini +13.6% for roll-out of a multimedia portal and Internet access service which is currently being tested by
Slide 15: Multi-usage
Multi-usage In m€ 29.5 29.5 + 17.3 % 22.4 27.1 Growth in government services 7.1 2.4 H1 2006-2007 H1 2007-2008 Capacity leased to other satellite operators Government services 15
Slide 16: First Half 2007-2008
First Half 2007-2008 1. Achievements in line with strategy 2. Robust growth and enhanced visibility 3. Further improvement in financial performance 4. Securisation, Expansion and Innovation, three pillars supporting infrastructure development 16
Slide 17: First half 2007-2008: quality of financial metrics
First half 2007-2008: quality of financial metrics In m€ + 5.9 % 329.6 349.2 Increase in EBITDA H1 2006-2007 H1 2007-2008 In m€ + 18.6 % Significant increase of net cash flow from 240.3 285.0 operating activities: 66.4% of revenues H1 2006-2007 H1 2007-2008 Net debt to EBITDA ratio maintained at 3.5
Slide 18: Strong rise in consolidated net income: +18.5%
Strong rise in consolidated net income: +18.5% Summary income statement in M€ H1 2006-2007 H1 2007-2008 % Change Revenues* 415.3 429.4 +3.4% Operating expenses (85.7) (80.2) -6.4% EBITDA 329.6 349.2 +5.9% Operating income 179.5 193.3 +8.0% Financial expenses, net (56.5) (56.3) -0.5% Income tax (45.6
Slide 19: Record EBITDA margin at 81.3%
Record EBITDA margin at 81.3% Eutelsat remains the most profitable operator of Fixed Satellite Services* 81.3% 79.4% H1 2006-2007 H1 2007-2008 ► Continuous revenue growth Improved operating expenses > Lower in-orbit insurance costs upon annual contract renewal, with improved level of risk hedging >
Slide 20: Significant increase of net cash flow from operating activities
Significant increase of net cash flow from operating activities: 66.4% of revenues Net cash flow from operating activities: +18.6% Extract from cash flow statement In M€ H1 2006-2007 H1 2007-2008 Net cash flow from operating activities 240.3 285.0 Capital expenditure (138.1) (148.5) Operating free c
Slide 21: Optimised and hedged debt
Optimised and hedged debt Net debt to EBITDA: 3.5 X ► Eutelsat SA debt largely hedged 2,302 M€ M 2,338 M€ M against interest rate fluctuations until November 2011 ► Eutelsat Communications’ drawn down debt entirely hedged until 751 bp June 2013 1001 bp 1,570 1,332 ► Average maturity: 4.7 years 701 b
Slide 22: First Half 2007-2008
First Half 2007-2008 1. Achievements in line with strategy 2. Robust growth and enhanced visibility 3. Further improvement in financial performance 4. Securisation, Expansion and Innovation, three pillars supporting infrastructure development 22
Slide 23: New sources of growth
New sources of growth 1995 2003 2010 2007 HOT BIRDTM SKYLOGIC Launch of Launch of neighbourhood established ToowayTM in Ka-band KA-SAT established Launch of D-STAR 1983 2010 TELEPHONY TELEVISION & PROFESSIONAL NETWORKS VALUE ADDED SERVICES 23
Slide 24: KA-SAT TOOWAY
KA-SAT TOOWAY™ Multiple spotbeam architecture of Ka-band satellite + state-of-the-art technology for ground segment Integrated infrastructure GROUND & SATELLITE managed by Skylogic in partnership with ViaSat, a technology leader Local and regional television Satellite-based “triple play ” offer Copo
Slide 25: Ground segment design
Ground segment design Artistic view non contractually binding 25
Slide 26: KA-SAT coverage
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Slide 27: Significant advance in satellite broadband
Significant advance in satellite broadband Cost per GigaByte 30 8-fold reduction in cost per GigaByte compared with 25 Ku-band satellites thanks to innovative design and 20 ground infrastructure 25 € €/Gbyte 15 10 5 3€ Use of state-of-the-art ViaSat Surfbeam® DOCSIS® 0 terminals 3-fold reduction in
Slide 28: Consumer Broadband Market
Consumer Broadband Market DSLAM DSLAM Fully served by DSL Underserved by DSL Unserved by DSL Areas further than 5 km from next Areas within 3 km of next DSLAM Areas within 3-5 km of DSLAM DSLAM High population density Average population density Low population density Usually 2-3 competing providers
Slide 29: KA-SAT TOOWAY
KA-SAT TOOWAY™ Ground segment Satellite and ground Distributor / End-user / provision segment operations Service provider Consumer Gateway Operates Ka-band satellite Manages end-user relationship, including Network support sales & marketing, billing, customer care Manufacture Manages end-to-end netw
Slide 30: 7 degrees East: a new premium neighbourhood with W3B
7 degrees East: a new premium neighbourhood with W3B Fill rate > 90% 7oEast 200 TV channels + key telecom services Demand from customers for sparing capacity Close to 10% of Group revenues, with key customers (Digiturk, European Broadcasting Union, Reuters...) W3B to be copositioned with W3A at 7 de
Slide 31: Mid-term objectives 2007-2010
Mid-term objectives 2007-2010 2007 - 2008: 850 M€ to 860 M€ Revenues 2007 - 2010: CAGR > 5.5% 2007 - 2008: > 78% EBITDA margin 2008 - 2010: > 77% Capital expenditure 2007 - 2010: 450 M€ per annum on average Distribution Pay-out ratio of 50% to 75% Page 31 31 Assemblée Générale – 9 novembre 2007
Slide 32: Eutelsat Communications First half 2007-2008 results
Eutelsat Communications First half 2007-2008 results February 14, 2008
Slide 33: Strong and robust business model
Strong and robust business model A satellite infrastructure operator shows a typical cash flow profile of a “traditional” infrastructure operator High backlog, generating visibility on revenues Economies of scale on Capex and Opex base High operational margin High and continuous operating cash flow
Slide 34: Change in net debt
Change in net debt In € millions H1 2006-2007 H1 2007-2008 Net cash flow from operating activities 240.3 285.0 Capital expenditure (138.1) (148.5) Operating free cash flow 102.2 136.5 Interest and other fees paid, net (37,0) (42,1) Acquisition of minority interests (7.9) (3.4) Capital increase 1.5 0
Slide 35: Eutelsat Communications First half 2007-2008 results
Eutelsat Communications First half 2007-2008 results February 14, 2008
Eutelsat Communications — H1 2007-2008 Earnings Presentation on 6ix