Inmarsat plc preliminary 2010 for printing · Inmarsat plc – net debt 800 1,000 1,200 1,400 1,600 Convertible Bond 2017 Senior Notes Due 2017 $644m of available liquidity through
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Inmarsat plcQ4 & preliminary full year results 2010
7 March 2011
The mobile satellite companyTM
7 March 2011
Forward-looking statements
Certain statements in this presentation constitute “forward-lookingstatements” within the meaning of the U.S. Private Securities LitigationReform Act of 1995. These forward-looking statements involverisks, uncertainties and other factors that may cause our actualresults, performance or achievements, or industry results, to be materiallydifferent from those projected in the forward-looking statements. Thesefactors include: general economic and business conditions; changes intechnology; timing or delay in signing, commencement, implementation
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technology; timing or delay in signing, commencement, implementationand performance of programmes, or the delivery of products or servicesunder them; structural change in the satellite industry; relationships withcustomers; competition; and ability to attract personnel. You are cautionednot to rely on these forward-looking statements, which speak only as of thedate of this presentation.
We undertake no obligation to update or revise any forward-lookingstatement to reflect any change in our expectations or any change inevents, conditions or circumstances, except where we would be required todo so under applicable law.
Full year results 2010
Andrew Sukawaty
Chairman & Chief Executive Officer
The mobile satellite companyTM
Chairman & Chief Executive Officer
2010 financial highlights
Total revenue up 12.9% to $1,171.6m (2009: $1,038.1m)
• Inmarsat Global revenue up 10.0% to $764.1 (2009: $694.8m)
EBITDA up 17.1% to $696.1m (2009: $594.2m)
• Inmarsat Global EBITDA up 15.6% to $572.8m (2009:
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• Inmarsat Global EBITDA up 15.6% to $572.8m (2009:$495.5m)
Operating profit up 29.1% to $460.6m (2009: $356.8m)
EPS up 73% to 57 US cents (2009: 33 US cents)
Final dividend up 10.0% to 22.26 US cents per share
Inmarsat Global – MSS revenue
75.8 101.0
103.5111.7
500
600
700
800
US$m
$727.0$682.8
+6.5%
Aero +33.2%
Leasing +7.9%
5
357.0 360.6
146.5 153.7
0
100
200
300
400
500
FY 2009 FY 2010
Maritime +1.0%
Land +4.9%
Inmarsat plc – 5-year EBITDA record
$531$594
$696
500
600
700
800
US$m+17.1%
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$332$388
0
100
200
300
400
500
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
Total dividends
20.6322.69
20
25
US$ cents
36.69 cents33.36 cents +10.0%
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12.7314.00
0
5
10
15
FY 2009 FY 2010
InterimInterim Final Final
2010 operational achievements
Commitment to Inmarsat-5 and Global Xpress investmentprogramme to address incremental opportunities
Handheld strategy implemented with launch of global handheldservice, IsatPhone Pro
LightSquared Cooperation Agreement triggered, realising value
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LightSquared Cooperation Agreement triggered, realising valueafter 3 years of work on ATC
New 5-year growth target for core MSS revenue
3-year minimum 10% dividend growth commitment
Successful year for Segovia, new acquisition
Outlook for 2011
Confident in growth prospects and 5-year growth target
Multiple growth opportunities remain ahead
Material new revenue and profit resulting from CooperationAgreement with LightSquared
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Near term core business trends will constrain core MSSrevenue growth to 2% – 4% in 2011
Investment programmes on track an unchanged as to expectedcost, 2011 capital expenditure at $450m - $550m
Dividend growth of at least 10%
Q4 & full year results 2010
Rick Medlock
Chief Financial Officer
The mobile satellite companyTM
Chief Financial Officer
Inmarsat plc - 2010 full year results
Financial year
US$m 2010 2009
Revenue 1,171.6 1,038.1 12.9%
Operating costs (475.5) (443.9) (7.1%)
EBITDA 696.1 594.2 17.1%
Depreciation & amortisation (234.6) (231.6)
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Depreciation & amortisation (234.6) (231.6)
Other (0.9) (5.8)
Operating profit 460.6 356.8 29.1%
Net interest payable (127.1) (159.9)
Profit before tax 333.5 196.9 69.4%
Tax expense (72.4) (44.1)
Profit for the period 261.1 152.8 70.9%
Inmarsat plc - 2010 cash flow
Financial year
US$m 2010 2009
EBITDA 696.1 594.2 17%
Working capital/non-cash items 89.7 51.6
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Working capital/non-cash items 89.7 51.6
Operating cash flow 785.8 645.8
Capital expenditure (180.7) (162.8)
Cash interest (92.0) (109.6)
Cash tax (42.8) (24.6)
Free cash flow 470.3 349.0 35%
Inmarsat plc – net debt
800
1,000
1,200
1,400
1,600
ConvertibleBond 2017
Senior NotesDue 2017
$644m of available liquiditythrough cash and bankfacilities
Legacy Stratos debtrefinanced in 2010
US
$m
$1,102
$288
13-400
-200
0
200
400
600
800
SeniorFacility 2012
EIB Facility2018
Due 2017
Cash
New 8-year EIB Facilityfully drawn
New US Ex-Im Bankfinancing progressing
US
$m
$650
$308
-$344
Group leverage:Net Debt / EBITDA=1.6x
$200
Inmarsat Global Ltd - Q4 MSS revenue
20.6 24.2
27.4 25.6
120
140
160
180
200
US$m
$179.0$176.9
+1.2%
Aero +17.5%
Leasing -6.6%
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91.2 91.3
37.7 37.9
0
20
40
60
80
100
120
Q4 2009 Q4 2010
Maritime +0.1%
Land +0.5%
Maritime sector
65.5 66.6
40
50
60
70Over 10,000 FleetBroadbandterminals added in 2010
Data growth constrained byspeed of FleetBroadband takeup as traffic re-priced to lower
US$m
15
25.7 24.7
0
10
20
30
40
Q4 2009 Q4 2010
Voice Data
up as traffic re-priced to lowertariffs
Voice usage impacted by emailsubstitution and increasedcompetition
Some increasing competitionfrom VSAT as industry reactsto Global Xpress
Land mobile sector
35.7 36.0
25.0
30.0
35.0
40.0BGAN up 6% year over year andup 3% sequentially• 1,738 terminals added in quarter
• ARPU steady at $200 per month
• No identified event revenues
Lower revenue levels from
US$m
16
2.0 1.9
0.0
5.0
10.0
15.0
20.0
Q4 2009 Q4 2010
Voice
Lower revenue levels fromAfghanistan are being replacedwith more BGAN organic growth
Strong performance fromtelemetry services
IsatPhone Pro not yet material tonumbers
Aeronautical & Leasing
20.6
24.227.4
25.6
15
20
25
30Aero revenue up 17.5%
SwiftBroadband terminal salesstrong, our leading aero service
Lower cost SwiftBroadband 200developed/launched
US$m
17
0
5
10
15
Q4 2009 Q4 2010
Aero Leasing
developed/launched
Government aero usage levelsdown, suppressed by lower regionalactivity and emerging budgetaryconstraints
Leasing revenue impacted byanticipated end of an aeronauticallease and reduced maritime lease
Leasing pipeline positive
Stratos – Q4 results
34.629.3
22.2 40.1
120
140
160
180
200 +4.9%Inmarsat MSS revenuesimpacted by:
• Pricing pressure in distributionchannel
• Factors consistent withInmarsat Global Q4
Other MSS-15.3%
Broadband+80.6%
US$m
18
110.0 105.6
0
20
40
60
80
100
Q4 2009 Q4 2010
Inmarsat Global Q4
Other MSS reduced by lowertraffic from other networks
Growth in Broadband driven bynew contribution from Segovia
Broadband contract disposalsaffects comparability
Inmarsat-4.0%
Inmarsat plc – financial summary
EBITDA growth ahead of revenue growth
Profit before tax up 69% to $333.5m
Free cash flow up 35% to $470.3m
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Significant cash inflows from Cooperation Agreement
2010 dividend increased by 10%, covered 1.6x
Strong liquidity and low debt leverage
Strategy and operations review
Andrew Sukawaty
Chairman & Chief Executive Officer
The mobile satellite companyTM
Chairman & Chief Executive Officer
2011 priorities – a key year ahead
Core MSS market initiatives to improve growth rate and
continue market leadership
Develop market proposition for IsatPhone Pro and build on
early positive market feedback
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early positive market feedback
Contract planned capital investments and assemble full team
to deliver Global Xpress on budget
Implement LightSquared Cooperation Agreement to capture
new value for shareholders
MSS maritime initiatives
Consolidate on FleetBroadband’s leading market position
• New pricing plans to ensure attractiveness relative to VSAT plans
• Inmarsat-B to FleetBroadband migration promotions to lock-inshipping fleets considering upgrades
• Communicate future service proposition of integrated Ka and L-band capability
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band capability
• Ka-band awareness retains customers
Respond to voice market changes
• Develop crew services around data applications to reduce appealof voice alternatives
• Develop multi-channel voice capability to improve positioningrelative to low-end voice alternatives
MSS land initiatives
BGAN is growing well, but fluctuates with government user activity
Introduce geographic pricing to change value proposition inmarkets where opportunity large, but existing usage low
Penetrate next tier of media and news gathering organisations
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Penetrate next tier of media and news gathering organisations
Satellite Low Data Rate
New product launches, next stage of SkyWave collaboration
BGAN M2M service
IsatPhone Pro – multiple market strategies
IsatPhone Pro
Strong positive market reaction to service launch
Retail handset price from $499, well below competitiveofferings
A number of pricing packages launched
Strong initial orders and good manufacturing
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Strong initial orders and good manufacturingperformance, despite global component shortages inearly phase
Not material in 2010, a gradual build ahead
Migration promotions, service enhancements
Comfortable with market share objectives
MSS aeronautical initiatives
SwiftBroadband now our leading aeronautical product and strongnew terminal activations are continuing
SwiftBroadband 200 available to target untapped market opportunityin small business jets
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In-flight passenger connectivity remains at an early stage of roll-outbut retains significant longer term potential
Continue to support distribution in new commercial servicelaunches and trials
Articulate Ka-band capability to keep strong hold on marketopportunity as it develops
The impact of LightSquared
Phase 1 and Phase 2 nowtriggered
Significant new revenue andprofitability ahead
Cash inflows well ahead of
Cash payments received to date:
Phase 1 = $192.5m
Phase 2 = $20.1m
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Cash inflows well ahead ofaccounting revenue recognitionand cash costs
Confident on managinginterference and customer impact
Downside protected
Total = $212.6m
Revenue recognised to date:
Total = $17.5m
Inmarsat-5 - Global Xpress
Satellite manufacture underway
iDirect selected for ground network and core module
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iDirect selected for ground network and core module
Sea Tel selected for terminal development
Key personnel appointments
On track for commercial service in 2013, global service by end 2014
Strong market interest in service capability and distributionopportunities
Summary
Another strong year completed, 5-year targets outperformed atrevenue and EBITDA
Retain 5-7% medium term average growth rate target
New growth opportunities becoming reality, IsatPhone Pro andLightSquared Cooperation Agreement
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LightSquared Cooperation Agreement
Commitment to Global Xpress for incremental marketopportunities
Multiple paths to further growth remain
Committed dividend growth
Questions & Answers
Inmarsat plc
The mobile satellite companyTM
Inmarsat plc
Q4 & preliminary full year results 2010
7 March 2011
www.inmarsat.com
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