Eutelsat Communications Sa · EURONEXT:ETL
Eutelsat Communications Sa — FY2015-16 Earnings Presentation
30 slides from Eutelsat Communications Sa's earnings presentation, Jul 29, 2016
Slide 1: Full Year 2015-16 Results
FULL YEAR 2015-16 RESULTS July 29, 2016
Slide 2: Key data
Key data ► Revenues of €1,529m, up 3.6% REVENUES ► + 0.2% at constant currency ► EBITDA of €1,165m EBITDA ► EBITDA margin of 76.2% ► Group share of net income at €348m NET INCOME ► Net margin of 23% FINANCIAL ► Discretionary Free-cash-flow1: €247m POSITION ► Net Debt / EBITDA ratio of 3.4x ► Propose
Slide 3: FY 2015-16 highlights
FY 2015-16 highlights ► Successful launch of five new satellites: EUTELSAT 8 West B , EUTELSAT 36C, EUTELSAT 9B, EUTELSAT 65 West A and EUTELSAT 117 West B ► Video: Channel line-up exceeding 6,000, HD channels up 26%, launch of first commercial UHD channels on our fleet ► Implementation of initiativ
Slide 4: Agenda
Agenda 1 Recent highlights 2 Operational performance 3 Financial performance 4 Outlook 4
Slide 5: FY Revenues: €1,529m, +3.6% reported, +0.2% like-for-like
FY 16 Revenues: €1,529m, +3.6% reported, +0.2% like-for-like1 REVENUE REVENUES3 CHANGE (%) CONTRIBUTION2 (€m) LIKE-FOR-LIKE REPORTED Video 64% 944 +2.3% +3.4% Data 16% 230 -6.1% +1.5% Services Value-Added 7% 108 +4.8% +5.2% Services Government Services 13% 200 -7.5% +1.7% 1 At constant currency and
Slide 6: Video
Video REVENUES (€M) ► FY 16 Revenues of €944m, up 2.3% like-for-like1 ► Sustained growth in MENA and SSA 913 944 • Entry into service of EUTELSAT 8 West B in October and EUTELSAT 36C mid-February Q4 236 Q4 235 • Growth at 7°East (Middle East and Africa) and 16° East (SSA and Central Europe) Q3 225 Q
Slide 7: Data Services
Data Services REVENUES (€M) ► FY 16 Revenues of €230m, down 6.1% y- o-y at like-for-like1 ► Broadly stable revenues excluding 227 230 • End of contract for Ka-band on EUTELSAT Q4 61 Q4 58 3B in December • Reclassification of revenues to Government Services Q3 54 Q3 58 ► Higher volumes in the America
Slide 8: Value-Added Services
Value-Added Services REVENUES (€M) ► FY 16 Revenues of €108m, up 4.8% y-o-y like-for-like1 ► 181,000 terminals activated on 108 102 KA-SAT at 30 June 2016 • Continued high loading of some beams in Q4 27 Q4 28 France and the UK • Rationalization of customer base by certain distributors Q3 25 Q3 23 ►
Slide 9: Government Services
Government Services REVENUES (€M) ► FY 16 Revenues of €200m, down 7.5% y-o-y like-for-like1 • Down c. 12% excluding impact of reclassifications from Data Services 200 196 ► Early termination of a contract with Q4 44 Q4 55 a distributor in Q1 ► Impact of lower renewals with US Q3 50 Q3 49 DoD • Renew
Slide 10: Backlog
Backlog ► Backlog of €5.6bn, down 9.5% BACKLOG (€BN) y-o-y • 3.7 years of revenues ► Main contracts signed this year … • Multi-year renewal of capacity at 36° East with Russian customers 6.2 5.9 5.6 • New contracts including notably EAS fleet and 7/8°West position • EBU contract at several orbital p
Slide 11: Fill rate
Fill rate OPERATIONAL AND LEASED TRANSPONDERS ► Operational transponders up by 43 Q-o-Q • Entry into service of EUTELSAT 65 1,328 1,285 West A in May 1,168 ► Leased transponders up by 13 919 929 942 Q-o-Q • Expansion of capacity contracted by EBU for Professional Video • Ramp-up of capacity on EUTEL
Slide 12: Agenda
Agenda 1 Recent highlights 2 Operational performance 3 2 Financial performance 4 Outlook 12
Slide 13: Profitability
Profitability EBITDA (€M) ► EBITDA up 2.9% 1,132 1,165 ► EBITDA margin of 76.2% • Versus 76.7% last year ► Higher level of bad debt • Termination of contract for Ka-band Margin 76.7 76.2 payload of EUTELSAT 3B in (%) 77.4 77.4 77.5 December 2015 FY 2014-15 FY 2015-16 13
Slide 14: Net income of €348m, net margin of 23%
Net income of €348m, net margin of 23% Extracts from the consolidated income FY FY statement in €m1 2014-15 2015-16 Var. Revenues 1,476 1,529 + 3.6% ► Positive currency impact of 3.5 points EBITDA2 1,132 1,165 + 2.9% ► Higher expenses related to the kick-off of African Broadband project Operating ►
Slide 15: Discretionary Free-Cash Flow
Discretionary Free-Cash Flow In €m (514) 1 (1) 896 (134) 247 (1) Net cash Flow Cash Capex Interest and Other Discretionary from operations fees paid net of Free Cash-flow interests received (1) Cash Capex includes capital expenditures and payments under existing export credit facilities and under lo
Slide 16: Net debt
Net debt In €m 294 (247) 9 110 Change in Discretionary Dividend Others financial Free Cash Payment leases1 Flow 4,007 3,841 3,713 Net Debt at Net Debt at June 30, 2016 Net Debt at June 30, 2015 Before change in June 30, 2016 financial leases as reported (1) Excluding amount due to RSCC (€95 million)
Slide 17: Financial structure
Financial structure NET DEBT / EBITDA RATIO1 ► Successful €500m bond issue in June to refinance March 2017 bond ► Swap-lock in anticipation of the January 2019 bond maturity 3.4 3.4 3.2 ► Average cost of debt after hedging reduced to 3.5% ► Average weighted maturity extended to 3.4 years ► Strong li
Slide 18: Agenda
Agenda 1 Recent highlights 2 Operational performance 3 Financial performance 4 3 2 Outlook 18
Slide 19: Changing dynamics in our core businesses
Changing dynamics in our core businesses DATA SERVICES:STRUCTURALLY GOVERNMENT SERVICES: VIDEO: MODEST DEMAND GROWTH CHALLENGED POCKETS OF OPPORTUNITY ► Sustained growth in ► Global demand driven ► US DoD demand emerging markets by increasing stabilizing, albeit • Robust channel growth connectivity
Slide 20: Longer-term potential in Video and Connectivity
Longer-term potential in Video and Connectivity VIDEO FIXED AND MOBILE CONNECTIVITY ► Satellite and IPTV set ► Nascent markets to dominate global video distribution with huge potential in the longer term ► Massive growth in bandwidth ► Opportunity to enhance satellite usage per consumer value propos
Slide 21: Adapting strategy to new market conditions
Adapting strategy to new market conditions STEP 1 STEP 2 GROW CASH-FLOW GROW TOPLINE 2017-19 2019-2025+ Maximize free-cash-flow generation Build on our core Capture longer of existing businesses video business term potential to accelerate growth in Connectivity Financial and Optimizing operational r
Slide 22: Maximize free-cash-flow: Financial and operational measures
Maximize free-cash-flow : Financial and operational measures OPTIMIZATION OF COST OF CAPEX REDUCTION OTHER MEASURES DEBT ► Implement ‘design to ► €500m bond issue ► OPEX under review to cost’ approach at 1.125% coupon protect EBITDA • Refinancing of €850m ► Ground capex under March 2017 Bond ► Strea
Slide 23: Maximize free-cash-flow: Optimizing revenues in each core business
Maximize free-cash-flow: Optimizing revenues in each core business ► Enhancing hotspot value generation Video ► Targeting growth in emerging markets Core businesses ► Developing satellite value proposition versus IPTV ► Mounting competitive pressure in coming years Data Services ► Managing the impac
Slide 24: Enhancing hotspot value generation: Update on HotBird action plan
Enhancing hotspot value generation: Update on HotBird action plan ► Measure: Extend control over network by taking back empty capacity from distributors GROW CASH-FLOW ► Renegotiation of re-take of empty HOTBIRD capacity from distributors fully completed at July 1st ► Equivalent to 5 transponders ►
Slide 25: Financial outlook
Financial outlook REVENUES ► FY 2016-17: Between -3% and -1% (At constant currency, and perimeter ► FY 2017-18: Broadly stable excl. non recurring revenues) ► FY 2018-19: Slight growth EBITDA MARGIN ► FY 2016-17 to FY 2018-19: above 75% ► FY 2016-17 to FY 2018-19: CAPEX Average of €420m1 per year’ ►
Slide 26: To Sum Up
To Sum Up: Stabilization of revenues in FY2017-18, with return to growth in FY2018-19 EBITDA margin maintained above 75% Steadily growing cash flow thanks to Capex reduction, Opex containment and balance sheet optimization …to fund ongoing deleveraging in line with commitment to Investment Grade rat
Slide 27: Appendices
APPENDICES a eutelsat
Slide 28: Fleet plan
Fleet plan EUTELSAT EUTELSAT EUTELSAT EUTELSAT EUTELSAT EUTELSAT AFRICAN Name 36 C 9B 65 WA 117 WB 172 B BBAND. 7C SATELLITE 36° East 9° East 65° West 116.8° 172° East 7°East TBD TBD Position West Launch Launched Launched Launched Launched H1 2017 H2 2018 2019 2019 Manufacturer Federal TBD TBD TBD L
Slide 29: Debt maturity schedule
Debt maturity schedule Will be used together with cash in Balance sheet to refinance €930m €850m €800m €39m €200m1 €500m €450m 5.0% 2.625% €300m €600m1 €190m 4.125% 1.125% 3.125% 3.125% 2017 2018 2019 2020 2021 2022 2023 2024 Undrawn lines of credit Term loan / undrawn line of credits (Eutelsat S.A)
Slide 30: 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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