Eutelsat Communications SA · EURONEXT:ETL
Eutelsat Communications SA — FY2016-17 Earnings Presentation
33 slides from Eutelsat Communications SA's earnings presentation, Jul 28, 2017
Slide 1: FY 2016-17 Results
FY 2016-17 RESULTS July 28, 2017
Slide 2: Agenda
Agenda 1 Highlights 2 Operational performance 3 Financial performance 4 Outlook 2
Slide 3: Delivering or over-delivering on all objectives
Delivering or over-delivering on all objectives Financial Actual REVENUES outlook performance Revenues -3 to -1% -2.2%1 vs. FY 16 EBITDA margin (at constant currency) Above 76% 76.6% Discretionary 3-year CAGR3 above 10% +65% Free Cash-flow2 vs. FY 16 Net Debt / EBITDA below 3.3x 3.2x Dividend per sh
Slide 4: Strong growth of Free Cash Flow: +65%
Strong growth of Free Cash Flow: +65% Change vs. FY 16 • Early cost-cutting gains Net Operating Cash Flow +€87m • Improvement in DSO and WCR trend • Impact of ‘design-to-cost’ Cash Capex +€100m • Reduction in ground capex • Full-year impact of ETL 36C Net Interest (€27m) lease and June 16 Bond • Str
Slide 5: Solid commercial performance
Solid commercial performance IN VIDEO IN OTHER VERTICALS ► HD take-up accelerating ► In-flight Connectivity on HOTBIRD contract wins ► Important renewals in Europe and MENA ► EGNOS payload on • At 28° East with Arqiva EUTELSAT 5 West B • At 7° East with Digitürk ► Multi-year contract with NTV-Plus i
Slide 6: Strengthened financial profile
Strengthened financial profile Successful launch of ‘LEAP’ cost-savings plan • €15m in savings in FY18 rising to €30m in FY19 EBITDA margin already target raised mid-year • From ‘above 75%’ Net Debt / EBITDA ratio reduced from 3.4x to 3.2x Refinancing of credit lines improving debt maturity Pre-Hedg
Slide 7: Laying the foundations for ongoing value creation
Laying the foundations for ongoing value creation SECURING DURABLE CASH FLOW GENERATION PREPARING FOR RETURN TO TOPLINE GROWTH THROUGH CAPEX EFFICIENCIES ► Application of ‘design-to-cost’ policy ► Launch of Russian Broadband • >30% capex savings already achieved on EUTELSAT 5 West B procurement ► La
Slide 8: Agenda
Agenda 1 Highlights 2 Operational performance 3 Financial performance 4 Outlook 8
Slide 9: FY 2016-17 Revenues of €1.478bn, -2.2% like-for-like
FY 2016-17 Revenues of €1.478bn, -2.2%like-for-like REVENUE REVENUES2 LIKE-FOR-LIKE3 CONTRIBUTION1 (€m) CHANGE CORE BUSINESSES Video 64% 908 -3.3% Fixed Data 12% 168 -14.0% Government 12% 176 -4.1% Services CONNECTIVITY Fixed 7% 96 +18.4% Broadband Mobile 5% 75 +22.5% Connectivity 1 The share of eac
Slide 10: Video
Video 64% REVENUES1 (€M) ► FY 17 revenues of €908m, down 3.3% like-for-like ► Broadcast revenues up 2.7% excluding • Rationalisation of capacity and end 937 908 of TV’ d’Orange at HOTBIRD Q4 236 224 • Lower revenues from FRANSAT Q4 ► Positive contribution from Q3 237 Q3 228 incremental capacity laun
Slide 11: Video: focus on broadcast revenues
Video: focus on broadcast revenues €m +2 +2.7% + 23 (41) 855 832 816 FY 2015-16 Underlying FY 2016-17 Currency HOTBIRD FY 2016-17 proforma growth underlying and Fransat Underlying growth in Broadcast revenues of 2.7% 11
Slide 12: HOTBIRD HD ramp-up continues to overtake MPEG 4 transition rate
HOTBIRD HD ramp-up continues to overtake MPEG 4 transition rate End of TV 1,030 d’Orange Others 1,002 -43 Resilient channel count +15 June 2016 June 2017 +29% 275 213 Acceleration in HD ramp-up June 2016 Mar. 2017 +10% 523 475 MPEG-4 still rising but at a lesser pace than HD June 2016 June 2017 1212
Slide 13: Fixed Data
Fixed Data 12% REVENUES1 (€M) ► FY 17 revenues of €168m, down 14.0% like-for-like ► Ongoing pricing pressure in all 193 geographies 168 Q4 45 ► Not offset by additional volumes Q4 41 ► Sequential underlying trends have Q3 47 improved throughout the year Q3 42 Q2 49 Underlying2 QoQ variation in reven
Slide 14: Government Services
Government Services 12% REVENUES1 (€M) ► FY 17 revenues of €176 million, down 4.1% like-for-like 181 176 ► Carry-forward of lower US DoD Q4 41 Q4 45 renewals in Spring 2016 campaign ► More favourable commercial Q3 45 Q3 45 activity in FY 2016-17 • Renewal rate of c.90% in Fall and c.85% Q2 47 Q2 44
Slide 15: Fixed Broadband
Fixed Broadband 7% REVENUES1 (€M) ► FY 17 revenues of €96m, up 18.4% like- for-like1 ► Entry into service of fully-sold HTS payload on EUTELSAT 65 West A in 96 May 2016 81 Q4 23 ► Solid European broadband Q4 22 performance Q3 24 ► Impact of contract termination for Ka- Q3 18 band payload on EUTELSAT
Slide 16: Mobile Connectivity
Mobile Connectivity 5% REVENUES1 (€M) ► FY 17 revenues of €75m, up 22.5% like-for-like 75 ► Agreement with Taqnia on the HTS payload of EUTELSAT 3B 60 Q4 19 ► Growing widebeam capacity sales at Q4 14 several orbital positions: Q3 17 • 10° East Q3 14 • 21° East Q2 18 • 172° East Q2 15 2 2 ► EUTELSAT
Slide 17: Backlog and Fill Rate
Backlog and Fill Rate BACKLOG (€BN) OPERATIONAL AND LEASED TRANSPONDERS 1,328 1,374 1,372 5.6 5.2 5.2 942 937 931 0.8 0.8 0.8 4.8 4.3 4.4 84% 30 June 2016 31 March 2017 30 June 2017 30 June 2016 31 March 2017 30 June 2017 Fill 70.9% 68.2% 67.9% Video Others rate Operational transponders leased trans
Slide 18: Agenda
Agenda 1 Recent highlights 2 Operational performance 3 2 Financial performance 4 Outlook 18
Slide 19: Profitability
Profitability EBITDA (€M) ► EBITDA margin rising to 76.7% despite lower revenues 1,165 1,134 • 76.6% at constant currency ► First benefits of early cost- cutting actions Margin (%) 76.2 76.7 ► Lower level of bad debt 77.4 77.4 77.5 ► Positive impact of disposal of non-core, lower margin businesses (
Slide 20: LEAP well on track to deliver €30m savings by FY19
LEAP well on track to deliver €30m savings by FY19 % of total Category Progress savings Technical Other technical spend 17% +++ Owned teleports 14% ++ External Teleports & leased lines 12% +++ Consultancy 20% ++ Marketing 13% ++ Indirect Real estate, FM, IT & Telecoms 12% ++ Travel 7% + Other non-te
Slide 21: Net income
Net income Extracts from the consolidated income FY FY Change statement in €m1 2015-16 2016-17 Revenues 1,529 1,478 -3.3% EBITDA2 1,165 1,134 -2.7% Operating ► Higher D&A 662 615 -7.1% ► Capital gain on Wins/DHI income ► Full-year impact of EUTELSAT 36C lease Financial result (123) (131) +6.4% ► Low
Slide 22: Discretionary Free-Cash Flow up 65%
Discretionary Free-Cash Flow up 65% In €m (414) +65% 983 1 (161) (1) 408 (1) Net cash Flow from Cash Capex Interest and Other Discretionary Free operations fees paid net of Cash-flow interests received Change + 87 +100 -27 +161 FY 2015-16 896 (514) (134) 247 (1) Cash Capex includes capital expenditu
Slide 23: Net debt down €366m
Net debt down €366m In €m -€366m (408) +266 (55) 1 (140) (29) 4,007 3,641 Net Debt at Discretionary Dividends Equity Change in Other Net Debt at end- June 16 Free Cash paid divestments financial end-June 17 Flow leases and ECA 1Excluding Payment of €95.2m to RSCC already reflected in Discretionary c
Slide 24: Financial structure
Financial structure NET DEBT / EBITDA RATIO1 ► Net Debt/EBITDA ratio reduced to 3.2x • vs 3.4x at 30 June 2016 3.4 3.2 ► Average cost of debt after hedging reduced to 3.1% • vs 3.5% in FY 2015-16 ► Repayment of Mar 17 bond to generate €30m savings in FY 2017-18 30 June 2016 30 June 2017 1Based on ne
Slide 25: Ongoing debt optimisation
Ongoing debt optimisation ONGOING DEBT OPTIMISATION DEBT MATURITY SCHEDULE Pre-hedge: €500m at ► One year extension of €600m term Pre-hedge: c. 1.12% €800m at ex. spread loan and €200m revolving credit c. 1.45% €930m ex. spread facility €800m €200m ► Refinancing of €450m revolving €500m €450m1 facil
Slide 26: Agenda
Agenda 1 Recent highlights 2 Operational performance 3 Financial performance 4 3 2 Outlook 26
Slide 27: Reminder: Our strategic roadmap
Reminder: Our strategic roadmap STEP 1 STEP 2 GROW CASH-FLOW GROW TOPLINE 2016-2019 2019-2025+ 2017-19 Maximise Build on our core Capture longer Free-Cash-Flow video business term potential generation to accelerate growth in Connectivity 27
Slide 28: Our priorities for FY 2017-18
Our priorities for FY 2017-18 ► Return to broad stability at HOTBIRD ► Proactive Video strategy around HD ramp-up, Stabilise new pricing policy and optimised distribution revenues ► Fill Data capacity Grow STEP 1 ► Leverage new resources to grow Connectivity Cash Flow Further ► Deliver on LEAP cost-
Slide 29: Financial outlook – all objectives maintained or raised
Financial outlook – all objectives maintained or raised REVENUES ► Broadly stable in FY 2017-181 (At constant currency, and perimeter) ► Return to slight growth from FY 2018-19 EBITDA MARGIN ► Above 76% in FY 2017-18 (At constant currency) ► Above 77% from FY 2018-19 ► FY 2017-18 to FY 2019-20: CAPE
Slide 30: To Sum Up
To Sum Up: Delivery on all financial objectives in FY 2016-17 All objectives maintained or raised for coming years Significant over-delivery on Discretionary Free-Cash-Flow generation Accelerated de-leveraging 10% rise in dividend ‘LEAP’ cost-savings plan well on track Materialisation of capex effic
Slide 31: Appendices
APPENDICES a eutelsat
Slide 32: Future launches
Future launches EUTELSAT EUTELSAT AFRICAN BROADBAND Name 7C 5 WEST B SATELLITE Orbital 7° East 5° West TBD TBD Position Launch date1 H2 2018 H2 2018 2019 2019 Manufacturer Launcher MENA Europe Flexible SSA Coverage SSA North Africa Video Video Government Broadband Applications Services Total Capacit
Slide 33: 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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