Eutelsat Communications SA · EURONEXT:ETL
Eutelsat Communications SA — FY2007-2008 Earnings Presentation
37 slides from Eutelsat Communications SA's earnings presentation, Jul 31, 2008
Slide 1: Eutelsat Communications 2007-2008 fiscal year earnings
Eutelsat Communications 2007-2008 fiscal year earnings July 31, 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: 2007-2008 fiscal year
2007-2008 fiscal year 1. Performance exceeding annual objectives 2. Further progression of operational indicators 3. Continuing improvement of financial indicators 4. Next target: revenues above €1 bn by 2011 3
Slide 4: 2007-2008: continuous progression of performance
2007-2008: continuous progression of performance In m€ + 5.9% Revenue growth: +7.3% excluding + 4.8% non-recurring revenues, 877.8 > Revenues exceed the 870 m€ objective > Sustained by Video applications and Value Added Services 2005-2006 2006-2007 2007-2008 In m€ + 6.6% + 5.9% EBITDA: +6.6%, confir
Slide 5: 2007-2008: achievements in line with strategy
2007-2008: achievements in line with strategy Strategic goal: Maximise revenue per transponder Stronger video Growing Value Added Services neighbourhoods > 515 new TV channels: + 19.7% > Continued growth of broadband access > New 9O East position (125 TV) successful services for corporations and ins
Slide 6: Business portfolio focused on Video Applications
Business portfolio focused on Video Applications VIDEO Priority given to Video Applications in resource allocation Development of Value Added Services • Video Applications: +10.0 % • Value Added Services: +10.6 % DATA & VAS MULTIUSAGES 75.5 Page 6% 17.7 % 6.8 % 6 As a % of 2007-2008 revenues, exclud
Slide 7: N°1 in Extended Europe with 3,123 TV channels
N°1 in Extended Europe with 3,123 TV channels : + 515 TV channels HOT BIRD™: leadership confirmed with more than 1,100 TV channels EUROBIRD™ 9: immediate commercial success of this orbital position twinned with HOT BIRD™ Major video neighbourhoods : +422 channels (+37.9%) driven by Russia, Africa an
Slide 8: Investments: 664 Tpx + New Ka- and S-band resources by FY 2011
INVESTMENTS: 664 Tpx + New Ka- and S-band resources by FY 2011 KASAT Premium video neighbourhoods HB 10 Major video neighbourhoods HB 9 HB 8 Other orbital positions Satellites ordered HB 7A SESAT 1 HB 6 TELSTAR Exp 12 AB 1 A3 AB 2 AB 4 AB 3 EB 4 W 3A EB9 W 1 W2 W6 EB 2 EB 1 EB 3 W4 SESAT 2 W5 13°°E
Slide 9: Increased securisation: towards 50% of revenues
Increased securisation: towards 50% of revenues • 1,100 TV channels, including 20 HD • Anchor DTH platform for many pay-TV channels 13oEast • More than 48 million individual satellite dishes REPRESENTING CLOSE TO 40% OF REVENUES* 100% immediate in-orbit sparing capability on this premium neighbourho
Slide 10: Opening new frequencies for new applications
Opening new frequencies for new applications Introduction of Mobile Services Introduction in Europe of Ka-band in S-Band broadband services First S-band payload in Europe on W2A Launched at the end of 2007 on HOTBIRD TM 6 (4 Tpx Ka) Creation of Solaris Mobile Ltd in Ireland > Expansion on EUROBIRD 3
Slide 11: KA-SAT TOOWAY: Broadband for everybody, everywhere
TM KA-SAT TOOWAY : Broadband for everybody, everywhere Satellite To be launched mid-2010 SATSOFT Number of spots: over 80 Ka spots in Extended Europe FWD capacity per spot: Above 450 Mbps 15 ° 20 ° OSLO St .Petersburg Gdansk DUBLIN WARSAW Lvov Kiev Kharkov Odessa Turin 15 ° MADRID ANKARA 20 ° Valenc
Slide 12: 2007-2008 fiscal year
2007-2008 fiscal year 1. Performance exceeding annual objectives 2. Further progression of operational indicators 3. Continuing improvement of financial indicators 4. Next target: revenues above €1 bn by 2011 12
Slide 13: Strong Operational Indicators
Strong Operational Indicators Nearly 4 years of revenues Exceptionally high fill rate secured by backlog reflects commercial dynamism Weighted average residual life of contracts: Fill rate 7.4 years + 64 468 3.7 bn € 3.4 bn € Leased transponders 404 other video 92 % 93 % 80.0 % 93.4 % 2006-2007 2007
Slide 14: Continuous revenue growth +5.9%, in advance on road map
Continuous revenue growth +5.9%, in advance on road map Evolution of revenues In M€ excluding non-recurring items + 7.3 % (*) 17.8 9.2 58.1 59.1 152.5 159.0 Other revenues Multi-usage 649.4 590.4 Data and Value Added Services Video Applications 2006-2007 2007-2008 12 months ending June 30 (*) +9.5%
Slide 15: Video Applications: robust momentum with +10% growth
Video Applications: robust momentum with +10% growth Double-digit growth sustained by Second Continent dynamics More than ¾ of activities In m€ + 10.0% 75.5% 73.0% 649.4 590.4 29,9 2006-2007 2007-2008 2006-2007 2007-2008 As a % of consolidated revenues Excluding other revenues and non-recurring item
Slide 16: Data / Broadband: Development of Value Added Services
Data / Broadband : Development of Value Added Services Data Services revenues stabilized in Q3 and Q4 In m€ Ongoing growth of D-STAR professional broadband service in areas not covered by terrestrial networks (Africa, Europe, Middle-East): 159.0 152.5 > + 1,478 additional terminals (+20%) over past
Slide 17: Multi-usage: +12% at constant exchange rate
Multi-usage : +12% at constant exchange rate In m€ 59.1 New contracts signed in 2007-2008 58.1 Renewal of contracts which expired during the period under review Adverse impact of the €/US$ exchange rate 2006-2007 2007-2008 17
Slide 18: 2007-2008 fiscal year
2007-2008 fiscal year 1. Performance exceeding annual objectives 2. Further progression of operational indicators 3. Continuing improvement of financial indicators 4. Next target: revenues above €1 bn by 2011 18
Slide 19: Continuing improvement of fundamentals
Continuing improvement of fundamentals +6.6 % In m€ +5.8% 695.7 652.6 Further EBITDA* increase 616.5 2005 - 2006 2006 - 2007 2007 - 2008 + 7.4 % In m€ 566.6 Sharp increase of net cash flows from operating activities 527.7 ►64.5 % of revenues 2006 - 2007 2007 - 2008 Net Debt / EBITDA decreased to 3.4
Slide 20: All financial metrics are up
All financial metrics are up Condensed income statement 2006-2007 2007-2008 Change % IFRS – in m€ Revenues* 829.1 877.8 +5.9 % ►Exceptionally high level of Other Revenues ►Strict cost control EBITDA 652.6 695.7 +6.6 % ►Highest EBITDA margin at 79.3% (+0.6 pp) Operating income 362.5 378.8 +4.5 % Impa
Slide 21: Operating cash flow above 64% of revenues
Operating cash flow above 64% of revenues In m€ 64.5% 63.6% 566.6 M€ 527.7 M€ +7.4% 174.4 177.6 144.1 350.1 422.5 Operating free cash flow CAPEX 2006-2007 2007-2008 21
Slide 22: Net Debt contained, decreasing to 3.48x EBITDA
Net Debt contained, decreasing to 3.48x EBIDTA In m€ OPERATING 17.2 20.4 CASH FLOWS 47.7 87.3 566.6 138.9 2,422 2,295 422.5 CAPEX Shareholders Net Minority interest In-orbit Others distribution financial acquisition incentives expenses June 2007 June 2008 3,52x DEBT NET / EBITDA 3,48x 22
Slide 23: Financial structure optimized in a difficult credit market
Financial structure optimized in a difficult credit market ► Lower average cost of debt 2 : 2,295 m€ 2,422 m€ from 4.00% in 06-07 down to 3.87 % in 07-08 ► Interest rate hedging: – Eutelsat SA debt largely hedged until November 2011 751 bp 751 bp 1,585 1,607 – Eutelsat Communications’ drawn debt ful
Slide 24: Steady growth in distribution
Steady growth in distribution 0.60 € 0.58 € 0.54 € 2005-2006 2006-2007 2007-2008 ATTRACTING DISTRIBUTION POLICY VISIBILITY AND CONTINUOUS GROWTH 24
Slide 25: 2007-2008 fiscal year
2007-2008 fiscal year 1. Performance exceeding annual objectives 2. Further progression of operational indicators 3. Continuing improvement of financial indicators 4. Next target: revenues above €1 bn by 2011 25
Slide 26: Next target: revenues above €1 bn by 2011
Next target: revenues above € 1 bn by 2011 2008 - 2009: Above 900 m€ Revenues 2009 - 2011: Above 1 bn € (CAGR of 6% over the period) 2008 - 2009: Above 78% EBITDA margin 2009 - 2011: Above 77% CAPEX 2008 - 2011: 450 m€/year on average Distribution Pay-out ratio of 50% to 75% 26 Assemblée Générale –
Slide 27: In summary, Eutelsat is…
In summary, Eutelsat is… The 3rd largest operator of Fixed Satellite Services 30 years of uninterrupted growth The world N°1 in terms of profitability Growth Visibility A key infrastructure for information society (telecommunications, television and broadband) 3,100 TV channels for more than 165 mil
Slide 28: Appendices
Appendices e e? es
Slide 29: 2007-2008: Another year of earnings improvement
2007-2008: Another year of earnings improvement Summary income statement 2006-2007 2007-2008 Change Highlights IFRS – in m€ % Revenues 829.1 877.8 + 5.9% ► Excluding one-off revenues: +7.3% Operating expenses (176.5) (182.1) +3.1 % ► Strict cost control EBITDA 652.6 695.7 + 6.6 % ► EBITDA margin: 79
Slide 30: Eutelsat Communications share structure
Eutelsat Communications share structure Ownership structure Public (1) Abertis 42.32 % Telecom 31.74 % CDC Infrastructure 25.94 % (2) (1) Public including instittutional minority shareholders and employees (2) Subsidiary of Caisse des Dépôts et Consignations. Including 0.65% held by CDC Fonds Propre
Slide 31: New sources of growth
New sources of growth 1995 2010 2003 2007 HOT BIRDTM SKYLOGIC established Launch of Launch of neighbourhood Launch of D-STAR ToowayTM in Ka-band KA-SAT established 1983 2010 TELEPHONY TELEVISION & PROFESSIONAL NETWORKS VALUE ADDED SERVICES 31
Slide 32: 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 33: Ground segment design
Ground segment design Artistic view non contractually binding 33
Slide 34: 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 35: 7 degrees East: a new premium neighbourhood with W3B
7 degrees East: a new premium neighbourhood with W3B Fillde Taux rate > 90% supérieur à 90 % remplissage 7oEast 200200 TV channels chaînes + key telecom TV + services télécoms services clés Demanddefrom Demande customersenfororbite sécurisation sparing de lacapacity part des clients Close to 10% of
Slide 36: 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 future revenues Economies of scale on Capex and Opex base High operational margin High and continuous operating cas
Slide 37: Eutelsat Communications
Eutelsat Communications Full year 2007-2008 July 31, 2008 Giuliano BERRETTA Jean-Paul BRILLAUD Catherine GUILLOUARD Chief Executive Officer Deputy Chief Executive Officer Chief Financial Officer 37
Eutelsat Communications — FY2007-2008 Earnings Presentation on 6ix