Eutelsat Communications SA · EURONEXT:ETL

Eutelsat Communications SA — Investor Presentation (November 2024)

54 slides from Eutelsat Communications SA's investor presentation, November 2024

  1. Slide 1: Investor Presentation November 2024

    Investor Presentation November 2024 ©2023 Eutelsat Group. All rights reserved.

  2. Slide 2: Agenda

    Agenda Eutelsat in a snapshot Key market trends Combination with OneWeb Q1 2024-25 performance Strategy and Outlook Proposed partial sale of passive ground infrastructure Appendix Appendix FY 2023-24 financials ©2023 Eutelsat Group. All rights reserved.

  3. Slide 3: Eutelsat in a snapshot

    Eutelsat in a snapshot ©2023 Eutelsat Group. All rights reserved.

  4. Slide 4: Eutelsat within the satellite value chain

    Eutelsat within the satellite value chain TV broadcasters, Satellite Satellite Satellite Telecoms, Consumers manufacturers launchers operators Governments & businesses ©2023 Eutelsat Group. All rights reserved. 4

  5. Slide 5: Business characteristics

    Business characteristics  High barriers to entry • Finite resource of orbital positions and frequencies, regulated at ITU level and with key commercial orbital positions and spectrum already into use • High upfront CAPEX before operations • High technology and technical expertise through satellite

  6. Slide 6: Eutelsat Group Key data

    Eutelsat Group Key data REVENUE BREAKDOWN BY MARKET ➢ FY 24 revenues €1.2bn 2% 9% ➢ Global coverage with a fleet of 351 BY GEOGRAPHY Europe Geostationary satellites Americas 15% ▪ C. 1,200 transponders Middle East 51% ▪ Broadcasting c. 6,500 television channels Africa ▪ More than 690 Gbps high throu

  7. Slide 7: Revenues by application (FY 2023-24)

    Revenues by application (FY 2023-24) → Direct-to-Home (DTH) VIDEO 54% → Cable headends → Professional Video → Internet access for households FIXED & corporates 19% CONNECTIVITY → Mobile backhaul → Corporate networks GOVERNMENT → Military SERVICES 14% → Security → In-flight Connectivity MOBILE CONNEC

  8. Slide 8: Eutelsat OneWeb combination

    Eutelsat OneWeb combination ACCESS MASSIVE GROWTH POTENTIAL IN SATELLITE CONNECTIVITY Satellite Connectivity market estimated at c. $22bn in 20321 COMBINING HIGH-GROWTH POTENTIAL WITH CASH ONEWEB IS A UNIQUE ASSET GENERATIVE LEGACY BUSINESSES One-of-only two operational global LEO broadband constell

  9. Slide 9: Eutelsat Group operates global fleets of GEO and LEO satellites

    Eutelsat Group operates global fleets of 35 GEO and 654 LEO satellites GEO fleet Coverage ubiquity c.36,000 km Regional OneWeb LEO fleet 160 to 2,000 km Capacity densification Coverage ubiquity Resilience / Global availability Capacity densification Latency Resilience / availability Ease of installa

  10. Slide 10: Two highly complementary businesses

    Two highly complementary businesses GEO + LEO Geographical Capacity density: ability to focus capacity over high- Global coverage on track with expectations advantage demand regions Key value Low-cost sellable capacity: higher fill-rates than Low latency: critical for some applications and propositi

  11. Slide 11: New GEO assets delivering incremental capacity to address Connectivity market

    New GEO assets delivering incremental capacity to adress Connectivity market KONNECT VHTS EUTELSAT 10B  Entered service in October 2023  Entered service in July 2023  Ka-band capacity of 500 Gbps, offering capacity  Unique visibility spanning from the Americas to Asia allocation flexibility & op

  12. Slide 12: Eutelsat’s global GEO network

    Eutelsat’s global GEO network ©2023 Eutelsat Group. All rights reserved. 12

  13. Slide 13: Bond & Bank Debt maturity schedule

    Bond & Bank Debt maturity schedule 2.000% New €600m HY bond New 3y+1+1 2.250% 9.750% €450m RCF 1.500% Partial €53 m ➢ Average cost of debt after hedging of redemption of the €800m bond €53m 4.87%1 €623m €100m €600m ➢ Average weighted maturity of 3.5 €600m €400m €600m years1 €450m €177m €50m €53m €20

  14. Slide 14: Shareholder base

    Shareholder base Free float, 25.5% Bharti Space, LTD, 24.1% FSP1, 4.1% Bpifrance, 13.6% Hanwha, 5.4% UK Government, CMA-CGM 10.9% Participations, 1 Fonds Stratégique de Participations 5.5% Softbank, 10.9% As of November 2024 ©2023 Eutelsat Group. All rights reserved. 14

  15. Slide 15: Eutelsat CSR mission

    EUTELSAT CSR MISSION Our CSR mission revolves around four primary pillars all of which are in alignment with our sustainable business model As a member of the United Nations Global Compact since 2019, Eutelsat contributes to the achievement of 9 of the 17 SDGs ©2023 Eutelsat Group. All rights reserv

  16. Slide 16: ESG ratings

    ESG ratings CSR POLICY RECOGNISED BY ESG RATING AGENCIES Given the nature of its activities, the Group has a limited impact on greenhouse gases emissions ©2023 Eutelsat Group. All rights reserved. 16

  17. Slide 17: Market trends in our key verticals

    Market trends in our key verticals ©2023 Eutelsat Group. All rights reserved.

  18. Slide 18: Resilient long-term features of Video

    Resilient long-term features of Video Decline in channel count partly offset by rise in more bandwidth- hungry definition quality HD to grow in emerging video markets # channels per 36 Mhz 42,877 transponder 2022 2032 33,061 15 to 26 95% 84% 79% 28,080 X4.7 9,394 3 69% 56% 536 45% 46% 43% 9 to 15 40

  19. Slide 19: Strong growth prospects for satellite Connectivity market

    Strong growth prospects for satellite Connectivity market Connectivity: a $22bn opportunity 2022 2032 10 y Vertical Drivers Market Market CAGR Consumer broadband ● Internet access a fundamental need ● Universal service obligation pressure $900m $5.1bn +18% ● High cost of terrestrial rollout ● Long-t

  20. Slide 20: A $22bn NGSO-driven connectivity market opportunity for satellites

    A $22bn NGSO-driven connectivity market opportunity for satellites $21.8bn Satellite connectivity market expected to more than triple by 2032 … $16.0bn … mainly driven by NGSO growth NGSO: +34% CAGR  NGSO expected to grow c. 2.3x faster than overall market $5.4bn $0.9bn  NGSO to represent c. 70% o

  21. Slide 21: Mobility usages set to increase more than tenfold

    Mobility usages set to increase more than tenfold MARITIME CONNECTIVITY DEMAND IN-FLIGHT CONNECTIVITY DEMAND Projected number of connected ships by Projected number of connected planes by 2032 2032 5,561 North America 11,811 2022 2032 Western 1,765 2022 2032 Europe 5,334 998 MENA 3,876 80,674 530 LA

  22. Slide 22: Combination with OneWeb

    Combination with OneWeb ©2023 Eutelsat Group. All rights reserved.

  23. Slide 23: OneWeb at a glance

    ONEWEB AT A GLANCE Overview Assets Velocity ► One-of-only two global broadband ► Global stakeholders ► Revenue generating LEO ► c. $5bn deployed on Capex ► 5x usage growth on Network ► 654 satellites at 1,200 kms ► Highly skilled organization ► Strong distribution network ► 1.4 Tbps sellable capacit

  24. Slide 24: Constellation operational and delivering proven performance

    Constellation operational and delivering proven performance Network performance User experience HTS technology delivering up to 7Gbps Average global latency of 70ms per satellite Download speeds up to 195Mbps Robust 4G core network developed with telecom industry leaders Upload speeds up to 32Mbps S

  25. Slide 25: OneWeb has priority rights over Premium Spectrum bands

    OneWeb has priority rights over Premium Spectrum bands ► OneWeb has secured about 6 GHz of Strong Spectrum Positioning in Ku- and Ka-bands bandwidth − Ku-band (User links) Ku-Band Ka-Band − Ka-band (Gateway links) Bandwidth 2.5 GHz 3.3 GHz ► Highest priority in Ku-band (2.5 GHz) ► Strong Priority in

  26. Slide 26: Strong commercial momentum

    Strong commercial momentum Major contracts boosting backlog Reinforcing network of distributors ©2023 Eutelsat Group. All rights reserved. 26

  27. Slide 27: Landmark commercial deal with Intelsat for LEO capacity

    Landmark commercial deal with Intelsat for LEO capacity  Strategic multi-year partnership valued at up to $500 million over duration • Seven-year agreement commencing in mid-2024 • Firm commitment of $250m, including the $45m deal signed in March 2023 • Options for a further $250m  Significantly d

  28. Slide 28: Q1 2024-25 Performance

    Q1 2024-25 Performance ©2023 Eutelsat Group. All rights reserved.

  29. Slide 29: Recent Highlights

    Recent Highlights ➢ First Quarter Operating Verticals revenues of €297 million, up 5.5% in line with expectations; Full year financial objectives confirmed ➢ Growth in Connectivity on the back of LEO-enabled solutions ➢ Successful launch of the latest batch of 20 OneWeb satellites, reinforcing the c

  30. Slide 30: First Quarter 2024-25 revenues

    First Quarter 2024-25 revenues YoY revenue bridge (€m) +5.5%  Total revenues of €300m, up +5.9% like-for-like1 +15  Slight positive currency effect +1 +2 +8 • €/$ rate of 1.09 vs 1.09 last year  Positive swing of €2m in ‘Other Revenues’ 300 • Of which €0.2m related to hedging 274  Revenues of th

  31. Slide 31: Q1 Revenues by vertical

    Q1 Revenues by vertical REVENUE REVENUES LIKE-FOR-LIKE2 CONTRIBUTION1 YOY CHANGE (€m) VIDEO 51% 151.8 -7.3% FIXED 19% 56.5 +30.1% CONNECTIVITY GOVERNMENT 16% 46.4 +20.3% SERVICES MOBILE 14% 42.0 +18.8% CONNECTIVITY TOTAL OPERATING VERTICALS 296.7 +5.5% OTHER REVENUES 3.0 +€1.5m3 1 Share of each appl

  32. Slide 32: Video

    Video 51%  Q1 revenues of €151.8m, down 7.3% YoY like-for-like1  Secular market decline 651 785  Lower occasional use in Professional Video  Q1 revenues down 4.5% QoQ1 Q4 159  Several new and renewal contracts secured Q3 160 Q2 168 Q1 164 152 Q1 FY 2023-24 FY 2024-25 • 1 At constant currency an

  33. Slide 33: Fixed connectivity

    19% Fixed connectivity 234  Q1 revenues of €56.5m, up 30.1% YoY like-for-like1 • Acceleration in LEO services • Calendar effect of the entry into service of K-VHTS Q4 82  Q1 revenues down by 30.9% Q-o-Q1 • High level of equipment sale • Catch-up revenues recognition in Q4 FY24 Q3 57  Recent comme

  34. Slide 34: Government Services

    Government Services 16% 165  Q1 revenues of €46.4m, up 20.3% YoY like-for-like1 • Contribution from LEO-enabled connectivity solutions Q4 47  Q1 revenues -1.0% QoQ1 Q3 44  Fall 2024 renewal campaign with US Department of Defence confirming improved trend of Spring 2024 Q2 41  Renewal rate above

  35. Slide 35: Mobile connectivity

    Mobile connectivity 14% 159  Q1 revenues of €42.0m, up 18.8% YoY like-for-like1 • Ongoing strong growth of LEO-based connectivity solutions Q4 49 • Solid GEO performances, notably in aviation.  Q1 revenues down by 14.6% QoQ1 Q3 39 • Equipment revenues recognized in Q4 FY24.  Inmarsat Maritime sel

  36. Slide 36: Backlog

    Backlog OPERATIONAL & UTILIZED TRANSPONDERS BACKLOG (€BN) Excluding Managed services  Backlog at €3.9 billion on 30 September 2024 vs. €3.4bn on 30 September 2023  Representing 3.2 years of revenues 3.9 3.9 4.3.40  Connectivity accounting for over half Of which Connectivity 42% 56% 55% 30 Sep 202

  37. Slide 37: Strategy and Outlook

    Strategy and Outlook ©2023 Eutelsat Group. All rights reserved.

  38. Slide 38: A three-pillar strategy

    A THREE-PILLAR STRATEGY RELYING ON A STRONG FOUNDATION Eutelsat Telecom pivot 1 2 3 Maximize cash generation of Building Connectivity business Preparing LEO NEXT GEN and legacy business Hybrid GEO-LEO ➢ In Broadband via KONNECT and ➢ To fund our transition towards KVHTS, in particular ➢ To capture L

  39. Slide 39: Key assumptions for FY 2024-25

    Key assumptions ✓ Progress on LEO ramp-up; full deployment of ground for FY 2024-25 network expected by H1 2025 ✓ Robust Connectivity growth, driven by acceleration of OW service revenues ✓ Offsetting Video revenues expected down by mid-single digits in line with the broader market ✓ Adjusted EBITDA

  40. Slide 40: Progressive approach to OneWeb Next Generation constellation

    Progressive approach to OneWeb Next Generation constellation ✓Future investments prioritising business continuity for customers ✓Adapted to existing LEO network utilization ✓Technology maturity ✓Opportunities for partnerships ✓Financing options linked to partnerships ✓Within strict financial framewo

  41. Slide 41: Financial objectives

    Financial objectives1 REVENUES2 ► FY 2024-25 revenues of the four operating verticals around the same level as FY 2023-24 ADJUSTED ► FY 2024-25 Adjusted EBITA margin slightly below the EBITDA3 level of FY 2023-24 GROSS ► Between €700 and €800m in FY 2024-25 CAPEX LEVERAGE ► Targeting medium-term net

  42. Slide 42: Update on Iris2

    Update on Iris2 OPERATIONAL & UTILIZED TRANSPONDERS  SpaceRISE consortium selected by EU to procure, build and operate Iris2, the European secure multi-orbit satellite constellation constellation  Selection expected to lead to formal contract signing expected by the year end  Eutelsat will partic

  43. Slide 43: Proposed partial sale of Passive ground infrastructure

    Proposed partial sale of Passive ground infrastructure ©2023 Eutelsat Group. All rights reserved.

  44. Slide 44: Rationale of the deal

    Rationale of the deal ✓ Creating the world’s first pure-play, operator-neutral, ground station- as-a- service company ✓ Bringing together top-level teams combining satellite-specific knowledge with highly experienced infrastructure service operators for optimum customer service ✓ Shifting future pas

  45. Slide 45: Details of contemplated deal

    Details of contemplated deal Transaction Overview Post Transaction Structure ✓ Carve-out of the passive assets (land, buildings, support infrastructure, antennas and connectivity EQT circuits for the combined portfolio of teleports and SNPs) to form new, standalone company 20% 80% ✓ EQT to own 80% c

  46. Slide 46: Expected transaction timeline

    Expected transaction timeline 2024/ 2025/ 2026 Approval by: → Customary regulatory → Appropriate employee H1 calendar 2026 representative → Closing of the deal  Closing of the transaction expected in the First Half of calendar 2026, conditional upon: → Customary regulatory approval → Appropriate em

  47. Slide 47: Appendix: FY 2023-24 Financials

    Appendix: FY 2023-24 Financials ©2023 Eutelsat Group. All rights reserved.

  48. Slide 48: Profitability

    Profitability  FY 2023-24 Adjusted EBITDA at €718.9m down 12.9% YoY reported Adjusted EBITDA (€m)  Reflecting: • higher operating costs due to the impact of the consolidation 825 of OneWeb 719 • Cost rise nevertheless contained at +8.9%1, reflecting cost control measures  Adjusted EBITDA margin a

  49. Slide 49: Net income

    Net income Extracts from the FY FY • Other operating costs of €208m, versus income of consolidated income CHANGE €204m last year, mainly due to last year’s €352m statement in €m 2022-23 2023-24 payment related to Phase II of C-Band proceeds, as well as the fair value adjustment of shares owned by Re

  50. Slide 50: Cash Capex

    Cash Capex GROSS CASH CAPEX (€m) CAPEX (€m)  Cash Capex of €463 million • Reflecting the consolidation of OneWeb 517  Below initial estimates due to LEO 463 constellation phasing and capex delays  Gross Capex1 of €517 million 271  From FY2024-25 onwards Gross Capex to 77.4 77.4 77.5 be adopted a

  51. Slide 51: Change in net debt

    Change in net debt In €m (109) 113 517 48 75 (343) 2,766 (632) 2,544 Net Debt as of Operating Cash- Gross Capex Financial cost Assets disposal OW perimeter Other Net Debt as of 30/06/2023 flow 30/06/2024 ©2023 Eutelsat Group. All rights reserved. 51

  52. Slide 52: Financial Structure

    Financial Structure NET DEBT / Adjusted EBITDA RATIO  Net Debt/Adjusted EBITDA ratio of 3.79x • Versus 3.35x as of 30 June 2023 and 4.13x at end December 2023 3.79x 3.35x  Average cost of debt after hedging of 4.87% • Versus 2.96% in FY 23  Average weighted maturity of 3.5 years • Versus 3.6 y at

  53. Slide 53: IR contacts

    IR contacts Joanna Darlington Chief Communications and Investor Relations Officer T: +33 6 74 52 15 31 E: [email protected] Hugo Laurens-Berge Investor Relations Officer T: +33 6 70 80 95 58 E: [email protected] Christine Lopez IR Coordinator T: +33 1 53 98 47 02 E: [email protected]

  54. Slide 54: Disclaimer

    Disclaimer • NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO, OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. • This presentation (including any oral briefing and any question-and-answer in connection with it

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