EUTELSAT COMMUNICATIONS Investor Presentation September 2018

Transcription

1 EUTELSAT COMMUNICATIONS Investor Presentation September 2018

2 Agenda 1 FSS Industry 2 3 Eutelsat in a snapshot FY performance 4 Outlook 5 Appendix 2

3 The satellite value chain Satellite manufacturers Satellite launchers Satellite operators TV broadcasters, Telecoms, Governments Consumers and businesses 3

4 Business characteristics High barriers to entry Finite resource of orbital positions and frequencies, heavily regulated at international level with key commercial orbital positions have already been developed High upfront CAPEX before operations High technology & technical expertise through satellite lifecycle Profitable business model Significant backlog with long term contracts Economies of scale High operating margins Predictable operating cash flow 4

5 Trends in our core businesses VIDEO: SLIGHT GROWTH FIXED DATA: STRUCTURALLY CHALLENGED GOVERNMENT SERVICES: POCKETS OF OPPORTUNITY Sustained growth in emerging markets Robust channel growth Increasing HD penetration MENA and SSA leading growth Prices well-oriented Broad stability in Europe Broadly stable channel count HD and UHD ramp-up Improving encoding and compression Low growth Global demand driven by increasing connectivity needs Large HTS systems adding to existing overcapacity Ongoing severe pricing pressure More stickiness in certain segments In decline US DoD demand stabilizing, albeit at lower prices Slower migration to HTS than Data Services Opportunities in APAC and MENA Broad stability 5

6 Longer-term potential in Video and Connectivity VIDEO FIXED AND MOBILE CONNECTIVITY Satellite and IPTV set to dominate global video distribution in the longer term Opportunity to enhance satellite value proposition by offering IP-like viewer experience Outsourcing of services by broadcasters will create additional sources of demand Nascent markets with huge potential Massive growth in bandwidth usage per consumer Significant addressable market for Fixed Broadband via satellite: c. 2-3% of Households Medium-term potential in Aero Long-term potential in land Mobility VHTS a pre-requisite in terms of volume and pricing for mass-market adoption 6

7 Video drivers: Channel growth and image quality CHANNEL GROWTH INCREASED IMAGE QUALITY TV Channels in EMEA and LATAM HD penetration rate by major region CAGR: +1.5% ~24,000 ETL footprint 19% 43% ~20,500 Russia and Central Asia SSA 11% 19% 4% 36% MENA 16% 38% LATAM 24% 50% Central Europe 19% 50% Western Europe North America 29% 38% 74% 81% Predominantly driven by emerging Video markets Everywhere, including mature Video markets Source: Euroconsult

8 Video drivers: Capacity requirements versus compression technology EVOLUTION OF IMAGE QUALITY (NUMBER OF CHANNELS) NUMBER OF CHANNELS PER 36 MHZ TRANSPONDER Format Modulation MPEG-2 MPEG-4 HEVC SD DVB-S ~ DVB-S2 - ~ HD DVB-S DVB-S2 - ~9 ~ UHD DVB-S2 - - ~3 Standard Definition High Definition Ultra High Definition and 3D Source: Euroconsult 2017, EMEA and LATAM 8

9 Video: Satellite s competitive advantage over OTT / IP COST-EFFICIENCY UNIVERSAL REACH SERVICE QUALITY BROADBAND COVERAGE BANDWIDTH REQUIREMENT (Mbps) Cost OTT 1 UHD channel in HEVC 20 Satellite 72% 64% 75% 1 HD channel in MPEG % 17% 24% 1 SD channel in MPEG 2 3 # viewers Italy Poland EU Average Satellite a fraction of TV platforms operating costs CDN costs rise in line with audience growth For a large Pay-TV platform, OTT distribution would be much more expensive than satellite Satellite more cost efficient >50k viewers in Western Europe > 30 Mbps of which FTTP High cost of fibre roll-out Terrestrial networks cannot reach entire population Lower image quality Or even no service Satellite provides full coverage of a market Higher quality of image leading to increased bandwidth usage Congestion of terrestrial networks Video will represent >80% of IP traffic in 2021 Satellite and hybrid solutions give unimpaired viewing experience Source: Eutelsat analysis, European Commission - Broadband Coverage in Europe 2016, CISCO VNI

10 Video: Satellite resilience in Western Europe MILLION TV HOMES BY DISTRIBUTION MODE IN WESTERN EUROPE IP GAINING SHARE VS. TERRESTRIAL, NOT SATELLITE Slight increase in total number of TV homes 175 million Satellite reception broadly stable just below 50 million homes Satellite market share of 28% IP gaining share against terrestrial, not satellite Terrestrial Cable IP Satellite Source: Digital TV Research,

11 Video: Satellite gaining market share worldwide MILLION TV HOMES BY DISTRIBUTION MODE - GLOBAL Total number of TV homes to increase by 95 million to 1.7 bn by 2022 Satellite reception to grow by 50 million homes to 475 million by Satellite market share to rise from 26% to 28% Terrestrial Cable IP Satellite Source: Digital TV Research,

12 Agenda 1 FSS Industry 2 3 Eutelsat in a snapshot FY performance 4 Outlook 5 Appendix 12

13 Eutelsat in a snapshot KEY DATA REVENUE BREAKDOWN BY APPLICATION By geography Revenues of 1.41bn Fleet of 38 satellites; global coverage Operating >1,400 transponders 7% 11% 10% 5% 5% Western Europe Central Europe 31% MENA RCA SSA Americas 8% APAC 23% Unallocated and others Broadcasting >6,900 channels Backlog of 4.6bn, representing 3.2 years of revenues By application 6% 6% Video 12% 10% 66% Fixed Data Government Services Fixed Broadband Mobile Connectivity Data as of 30 June 2018 except for revenues by geography which are at 30 June

14 Breakdown of revenues by Application CORE BUSINESSES Video 66% Government Services Fixed Data 12% 10% Direct-to-Home (DTH) Cable headends Professional Video Military Security Mobile backhaul Corporate networks CONNECTIVITY Fixed Broadband 6% Mobile Connectivity 6% Internet access for households and corporates In-flight Connectivity Maritime Connectivity As of 30 June % of revenues excluding Other revenues 14

15 Eutelsat s global network 15

16 Bond and Bank Debt maturity schedule ONGOING DEBT OPTIMISATION BOND AND BANK DEBT MATURITY SCHEDULE Net Debt/EBITDA ratio reduced to 3.0x versus 3.2x at 30 June 2017 Pre-hedge: 800m at c. 1.45% ex. spread 800m Pre-hedge: 500m at c. 1.12% ex. spread 930m 200m Average cost of debt after hedging reduced to 2.9% versus 3.1% in FY % 2.625% 500m 1.125% 300m 600m 600m 3.125% 450m and 2020 bonds mid-swaps pre-hedged Commitment to Investment Grade ratings Undrawn lines of credit (Eutelsat S.A) Term loan / undrawn line of credits of Eutelsat Communications Outstanding Bonds Note: Maturities are provided on a calendar year 1 With 2 possible extension facility of one year subject to lenders agreement 16

17 Shareholder structure EUTELSAT SHAREHOLDING STRUCTURE AS OF 30 JUNE 2018 Bpifrance 26.4% Free float and others 59.4% CIC 1 6.7% FSP 2 7.5% 1 China Investment Corporation 2 Fonds Stratégique de Participations 17

18 Agenda 1 FSS Industry 2 3 Eutelsat in a snapshot FY performance 4 Outlook 5 Appendix 18

19 Full Year highlights Fully delivering on all Full Year financial objectives Improvement in revenue trends for the five operating verticals LEAP cost savings program ahead of track Effective design-to-cost policy with tangible reduction in Capex spend Hispasat disposal accelerating deleveraging towards target of <3.0x Proposed Dividend up 5% to 1.27, 1.4 times covered by DFCF Commercial wins underpinning return to slight growth next year Procurement of KONNECT VHTS to shape our Connectivity strategy 19

20 Fully delivering on all financial objectives Objective Performance Revenues -1 to -2% (at constant currency and perimeter) -1.9% 1 EBITDA margin Above 76% (at constant currency) 76.9% 2 Cash Capex Discretionary Free Cash-Flow Net Debt / EBITDA Average 420m p.a. Mid-single digit 3-year CAGR 3 (at constant currency) Below 3.0x 358m +11.9% 2 3.0x Dividend Stable or Progressing +5% ( 1.27 per share) See Appendix for full key financial data table 1 YOY Variation at constant currency and perimeter. Revenues down 4.7% on a reported basis. 2 At constant currency. EBITDA margin stood at 76.5%, on a reported basis. Discretionary Free Cash-Flow up 1.7% on a reported basis. 3 3-Year CAGR between FY 17 and FY

21 Revenues: operating verticals show progressive improvement FY revenues of 1,408m -4.7% reported -1.9% at constant perimeter and currency Operating verticals down 1.3% excluding Other revenues Progressive improvement through the year Operating Verticals: YoY change in revenues at constant currency and perimeter Q2 Q3 Q4 YOY REVENUE BRIDGE ( M) % (47) +5 (9) (19) % -1.1% -0.7% Reported FY Currency Perimeter Change in Other revenues 2 Operating verticals Reported FY Net of Hedging revenues 2 Excluding Hedging revenues 21

22 Solid commercial performance VIDEO GOVERNMENT SERVICES MOBILE CONNECTIVITY Channel count up 4.5% HD channels up 27% Positive outcome of HOTBIRD renewals New business secured In Europe: In Emerging markets: Favourable outcome of both Fall and Spring US DoD renewals Significant new business at new 174 East position Much of EUTELSAT QUANTUM capacity reserved MoU with China Unicom Remaining HTS capacity on ETL 172B sold to UnicomAirNet Incremental capacity sold to Taqnia on ETL 3B and ETL 70B 22

23 Revenues: like-for-like change by application REVENUE CONTRIBUTION 1 REVENUES ( m) LIKE-FOR-LIKE 2 CHANGE CORE BUSINESSES Video Government Services 66% % 12% % Fixed Data 10% % CONNECTIVITY Fixed Broadband Mobile Connectivity 6% % 6% % Other revenues % 1 The share of each application as a percentage of total revenues is calculated excluding Other Revenues. 2 At constant currency and perimeter. 23

24 Video 66% REPORTED REVENUES 2 ( M) FY Revenues of 897m, down 0.7% like-for-like 1 Broadcast revenues slightly up excluding end of TV d Orange Solid performance in MENA and Russia Ongoing decline in Professional Video Q4 revenues broadly flat YoY 6,929 channels at end-june % y-o-y HD channels up 27% 21.0% HD penetration (vs 17.2% a year earlier) Q4 Q3 Q2 Q Q Q Q Q1 223 FY FY At constant currency and perimeter 2 Reported revenues at actual rates. They include Noorsat s contribution from Q

25 Government Services 12% REPORTED REVENUES 2 ( M) FY revenues of 159 million, broadly stable like-for-like 1 Solid renewal rates with the US DoD in Fall and Spring campaigns Q Q Q4 revenues up 2.3% yoy Positive one-off in Q4 last year Initial ramp-up of incremental business at 174 East Commercial performance paving the way for improvement in trend in FY 19 Q3 Q2 Q1 45 Q Q Q1 41 FY FY At constant currency and perimeter. 2 Reported revenues at actual rates. 25

26 Fixed Data 10% REPORTED REVENUES 2 ( M) FY revenues of 143m, down 10.1% like-for-like 1 Ongoing pricing pressure in all geographies Absence of significant incremental volumes at this stage Q4 Q Q4 Q Q4 revenues down 10.6% yoy Q2 41 Q2 36 Continued decline expected in FY Q1 43 Q1 37 FY FY At constant currency and perimeter. 2 Reported revenues at actual rates. 26

27 Fixed Broadband 6% FY revenues of 87m, down 7.8% likefor-like 1 REPORTED REVENUES 2 ( M) Q4 revenues down 7.5% yoy Lower European Broadband revenues Scarcity of available capacity in Western Europe Q Q Slower than hoped-for progress by the retail joint-venture with ViaSat. Q3 24 Q3 22 FY 19 set for return to growth Q2 24 Q2 22 Launch of Konnect Africa on AY3 in August Actions in Europe to improve trends Q1 25 Q1 22 FY FY At constant currency and perimeter. 2 Reported revenues at actual rates. 27

28 Mobile Connectivity 6% FY revenues of 74m, up 18.2% like-for-like 1 Carry forward effect of the Taqnia contract signed last year Contribution of ETL 172B since end- November 2017 Continued growth on wide-beam capacity Q4 revenues up 14.6% yoy FY 19 to benefit from Start of the UnicomAirNet contract on EUTELSAT 172B in January 2019 Ongoing ramp up of capacity contracts on KA-SAT serving several airlines New contract with Taqnia REVENUES 2 ( M) 2 Q Q4 19 Q4 Q3 Q3 17 Q Q FY FY At constant currency and perimeter. 2 Proforma revenues at actual rates, reflecting the disposal of Wins/DHI for FY

29 Backlog and Fill Rate BACKLOG ( BN) OPERATIONAL AND LEASED TRANSPONDERS 1,372 1, Noorsat (0.4) June June 2018 Video Others Fill rate 30 June June % 68.1% Contracts added to the backlog including Polsat and TVN renewals at Hotbird, UnicomAirNet at 172 E and Taqnia 3.2 years of revenues Video accounting for 83% Operational transponders Utilized transponders OSD of EUTELSAT 172B end-nov incremental TPEs leased during the year Based on 36 MHz-equivalent transponders (TPE), excluding HTS capacity 29

30 Agenda 1 FSS Industry 2 3 Eutelsat in a snapshot FY performance 4 Outlook 4 5 Appendix 30

31 Reminder: Our strategic roadmap STEP 1 STEP 2 GROW CASH-FLOW GROW TOPLINE Maximise Free Cash Flow generation Extracting value from our core Video business Capture potential in Connectivity 31

32 Build on our core Video business to accelerate growth; capture longer term potential in Connectivity MEDIUM TERM (FROM FY 2019) LONG TERM (FROM FY 2021) VIDEO Build on our core business to accelerate growth FIXED BROADBAND Prepare for scalability MOBILE CONNECTIVITY From niche to mass market Growth potential of Video Opportunity for further value creation Harnessing technology Optimize existing assets within a limited current addressable market Progress on prerequisites for scalability Decide on scale and location of investments Use existing assets to anchor foothold in the market Selectively invest in capacity to improve coverage Pave the way for Mass market 32

33 Maximize free cash-flow: Financial measures CAPEX REDUCTION LEAP COST-SAVINGS PLAN Implement design to cost approach Ground capex under strict control Average annual cash Capex reduced by 100m 1 Launch of «LEAP», a wide-ranging cost-savings plan with a focus on external costs Annualised savings of 30m by FY 2019 of which 24m achieved in FY OPTIMIZATION OF COST OF DEBT OTHER MEASURES 500m bond issue at 1.125% coupon Refinancing of 850m Mar Bond (4.125% coupon) Swap-lock ahead of m bond Locked at c. 145 bps, (-90 bps) Swap-lock ahead of m bond 500m locked at c. 112 bps Annual savings of c. 30m from 2017 onwards, c. 50m from Streamlining the asset portfolio: sale of the Hispasat stake ( 302m) now completed Improving working capital through DSO optimization 1 Savings vs. FY basis 33

34 HOTBIRD constellation replacement showcasing effectiveness of our design-to-cost policy COMPELLING PROCUREMENT TERMS ENHANCED QUALITY OF SERVICE Two large satellites replace three for the same number of operational transponders Improved match of coverage with customer requirements Electrical propulsion enabling larger satellites for a given mass Improved wide-beam performance Additional high-power superbeam Incremental anti-jamming features High level of restorability Increased in-orbit life Greater value extracted from our core Video business Enhanced service levels delivered with significant capex savings 34

35 Video: Build on our core business to accelerate growth GROWTH POTENTIAL OF VIDEO OPPORTUNITY FOR FURTHER VALUE CREATION HARNESSING EXISTING TECHNOLOGY Video via satellite will continue to grow Distribution will be split between satellite and IPTV longer term Outsourcing of services by broadcasters will create additional sources of demand Greater integration within the IP ecosystem Enhance viewer experience Add new services for broadcasters, advertisers and consumers Develop connected terminals Improve efficiency Compression Encription Security Increase revenue Metadata management Targeted advertising Payment Enhance loyalty Multiscreen Smart EPG TV everywhere Enhance end-viewer experience to reinforce customer loyalty and generate additional revenue opportunities 35

36 Procurement of KONNECT VHTS shaping our Connectivity strategy Significant addressable market Core market for Fixed Broadband via satellite of c.5m households in Europe in 2030 Global revenues for in-flight Connectivity capacity expected to exceed 1bn by 2025 Game-changing technology and economics Springboard for growth from 2020 Contained within existing financial framework Production costs in line with our Capex/Gbps target Provision of a fibre-like service at a fibre-like price Paving the way for the transition from niche to mass market KONNECT capacity providing early-mover advantage as of 2020 KONNECT VHTS launched in 2021 Significant distribution agreements with Orange and Thalès KONNECT VHTS investment contained within existing capex objective Eutelsat retains infrastructure business model, protecting EBITDA margin 36

37 Update on strategic roadmap: key achievements in FY 18 STEP 1: GROW CASH-FLOW STEP 2: GROW TOPLINE LEAP ahead of track: 24m saved Capex Containment: Capex objective reduced to from 420m to 400m on average per annum Even after IFRS 16 impact Interest paid lowered by 53m Disposal of stake in Hispasat accelerating deleveraging New position at 174 East Much of ETL QUANTUM capacity now reserved Landmark MoU with China Unicom in Mobility Procurement of KONNECT VHTS shaping Connectivity strategy Major distribution agreements with Thalès and Orange 37

38 Update on strategic roadmap: Priorities for FY 19 STEP 1: GROW CASH-FLOW STEP 2: GROW TOPLINE Deliver full benefits of LEAP: 30m target Secure further interest cost savings through refinancing of Jan. 19 Bond Secure further capex efficiencies by ongoing implementation of design-to-cost Video: extract further value Continue HD/UHD stimulation Pursue implementation of new pricing policy Mine growth opportunities by enhancing end-viewer experience Broadband: prepare for growth Ready European operations for change in scale: distribution, IT organization Successfully deploy African Broadband business 38

39 Financial outlook: all elements confirmed or upgraded REVENUES (At constant currency, perimeter and accounting standards, excluding Other Revenues) Return to slight growth from FY for the five operating verticals 1 Excluding Other Revenues EBITDA MARGIN (At constant currency) Above 78% from FY Taking into account impact of IFRS 15/16 standards CAPEX DISCRETIONARY FREE CASH FLOW 3 (At constant currency) LEVERAGE FY to FY : average of 400m 2 per year Versus 420m previously and including IFRS 16 impact FY to FY : mid-single digit CAGR Investment grade rating Net debt / EBITDA below 3.0x DISTRIBUTION Stable to progressing dividend 1 Revenues for the five operating verticals stood at 1,360 million in FY As a reminder, the impact of the adoption of IFRS 15 standard adopted from 1July is estimated at c.- 15m to- 20m on FY revenues for the five operating verticals. 2 Inc. cash outflows related to ECA loan repayments and capital lease payments; 2 Net cash-flow from operating activities less Cash Capex less Interest and Other fees paid net of interest received. Three year CAGR calculated on the period FY to FY FY DFCF stood at 408m. 39

40 Future launches Name EUTELSAT 7C EUTELSAT 5 WEST B KONNECT KONNECT VHTS EUTELSAT HOTBIRD 13F EUTELSAT HOTBIRD 13G Orbital Position 7 East 5 West TBD TBD TBD 13 East 13 East Launch date 1 Q Q H H Manufacturer Launcher TBD TBD TBD Coverage MENA SSA Europe North Africa Flexible SSA Europe Europe Europe Europe Applications Video Video Government Services Connectivity Connectivity Government Video Video Total Capacity (TPE/Spotbeams) 49 Ku 35 Ku N/A 65 Ka / 75 Gbps ~230 Ka / 500 Gbps 73 Ku 3 73 Ku 3 o/w Expansion 2 19 Ku - N/A 65 Ka / 75 Gbps ~230 Ka / 500 Gbps Calendar year 2 Excludes unannounced redeployments Electrical propulsion HTS Payload 3 «*nominal capacity correponding to the specifications of the satellites. Total operational capacity at the HOTBIRD orbital position will remain unchanged with 102 physical transponders (95 TPE), once regulatory, technical and operational constraints are taken into account. 40

41 Agenda 1 FSS Industry 2 3 Eutelsat in a snapshot FY performance 4 Outlook 5 Appendix 41

42 Appendix 5.1 FY financials Miscellaneous 42

43 Profitability EBITDA ( M) LEAP cost saving plan ahead of track 24 m of savings against objective of 15m EBITDA margin of 76.9% at constant currency vs. 76.7% in FY 17 inspite of Lower Other revenues with less associated costs Slightly dilutive impact of the integration of Noorsat Margin at constant currency 1,134 1, % 76.9% FY FY Reported EBITDA marging stood at 76.5% 43

44 Net income Extracts from the consolidated income statement in m 1 FY FY Change Revenues 1,478 1, % EBITDA 2 Operating income Financial result Income tax Group share of net income 1,134 1, % % (131) (105) -19.6% (120) (143) +19.0% % Lower D&A reflecting end of life / full depreciation of several satellites Capital gain on Wins/DHI last year ; negative accounting one-off this year related to Noorsat acquisition Lower cost of debt following reimbursement of Mar 17 bond Unfavourable variation in Forex gains and losses Tax Rate of 32% vs 25% last year Non-cash positive one-off related to future reduction in French tax rate lower than last year Net margin of 21% 1 Rounded to closest million 2 EBITDA defined as operating income before depreciation, amortisation, impairments and other operating income/(expenses) 44

45 Discretionary Free Cash-Flow up 12% At constant currency In m +12% at constant currency 881 (358) 1 (108) (1) (42) Currency impact 415 Net cash Flow from operations Cash Capex (1) Interest and Other fees paid net of interests received Discretionary Free Cash-flow Change FY (414) (161) 408 (1) Cash Capex includes capital expenditure and payments under existing export credit facilities and long-term lease agreements on third party capacity. 45

46 Significant deleveraging In m - 399m (415) +295 (206) (16) (57) 3,641 3,242 Net Debt at end- June 17 Discretionary Free Cash-Flow Dividends paid Equity investments FX portion of CC Swap Change in fin. leases Net Debt at end-june 18 46

47 Financial structure NET DEBT / EBITDA RATIO 1 Net Debt/EBITDA ratio reduced to 3.0x versus 3.2x at 30 June 2017 Average cost of debt after hedging reduced to 2.9% versus 3.1% in FY x 3.0x Average weighted maturity of 2.2 years versus 3.0 years at 30 June June June Based on net debt at the end of the period and last twelve months EBTIDA 47

48 Impact of IFRS 15 and IFRS 16 Standards IFRS 15 and IFRS 16 adopted as of FY Main impacts of IFRS 15 Timing of revenue and cost recognition or reclassifications from costs to revenues Main items include marketing and technical contributions and SAC and terminals for the Fixed Broadband application Main Impacts of IFRS 16 Capitalization of short term operating leases previously accounted as opex Impact of IFRS 15 estimated between - 15M and - 20m on FY 18 revenues of which - 15m to - 20m on Operating Verticals Combined impact of IFRS 15 and IFRS 16 estimated at c.+1 point on EBITDA margin c.+ 30m on Net Debt c+ 5m/+ 10m on Cash Capex No impact on Discretionary Free Cash Flow 48

49 Appendix 5.1 FY financials Miscellaneous 49

50 HOTBIRD: HD ramp-up still outpacing MPEG 4 transition Resilient channel count stable 1,002 1, June 17 June 18 Sustained High Definition ramp-up Penetration % +20% % June 17 June 18 MPEG-4 increase trailing High Definition Penetration +10% % 57% June 17 June 18 50

51 Eutelsat Quantum: Cutting-edge technology Software-defined class of satellites First satellite to be launched in 2019 Manufactured by Airbus Defence and Space Incomparable flexibility in terms of: Coverage Bandwidth Power and frequency configurability Premium capacity through footprint shaping and steering, power and frequency band pairing that customers will be able to actively define Targeting for users operating in Government and Mobility markets Example of a coverage hopping between 2 markets Most of the capacity is devoted to Cairo, during day-time in Africa Most of the capacity is devoted to NYC, during day-time in Americas 51

52 Konnect Africa: all elements now in place PROGRESSIVE CAPACITY ROLLOUT EUTELSAT SERVICE AVAILABLE IN 19 SUB-SAHARAN COUNTRIES WITH THE ENTRY INTO SERVICE AY3 New management team now in place c.10 Gbps immediately available with launch of commercial service in August 2018 Followed by additional 75 Gbps with KONNECT expected to start operations in 2020 Phase 1 Countries served with Yahsat Capacity Phase 2 Additional countries served by KONNECT 52

53 Starting to address a high potential market SIGNIFICANT MARKET POTENTIAL MULTIPLE DISTRIBUTION CHANNELS STRONG LOCAL PARTNERS ALREADY SIGNED Low Broadband penetration Only 1% of households have a Fixed Broadband subscription Only 26% have a Mobile Broadband subsciption Adressable market for satellite Broadband estimated at c. 4-5 million premises in 2030 Including coverage and affordability criteria Traditional ISPs / Telecom service providers Potential partnerships with DTH operators Capilary local partners Banks, gas stations, drugstores etc. Smartwifi hotspots Sources:, ITU, Eutelsat analysis 53

54 Strong pipeline for in-flight Connectivity KA-SAT EUTELSAT 172B OTHER RESOURCES Several contracts signed using capacity on KA-SAT over Europe Finnair SAS El Al Icelandair Eutelsat provides satellite capacity, ViaSat is the prime contractor Customised HTS payload to support IFEC growth over APAC Fully sold to 2 major customers Panasonic China Unicom Panasonic to use also widebeam capacity to deliver live TV to aircrafts Contracts with Taqnia for four HTS Ka-band spotbeams on ETL 3B and widebeam capacity on ETL 70B Several contracts for the use of widebeam capacity by major service providers 54

55 Satellite programme capex profile BREAKDOWN OF CAPEX TYPICAL TIMING OF CAPEX PAYMENTS 30% 30% 40% YEAR 1 YEAR 2 YEAR 3 Others Insurance Launcher Satellite Capex generally split equally over three years prior to launch Insurance paid in year three 55

56 Design-to-cost: EUTELSAT 5 West B case study DESIGN-TO-COST Improved match of coverage with customer requirements Lower cost of payload Smaller platform LAUNCH Shared launch in a stacked configuration on a Proton rocket Lower launch cost Lower insurance cost >30% 1 in capex savings Improved IRR Enhanced performance (1) relative to the theoretical cost of replicating EUTELSAT 5 West A s Ku band mission 56

57 Satellite economic model 1 : Regular capacity 1 For a greenfield satellite, using chemical propulsion 57

58 IR Contacts Joanna DARLINGTON T: E: jdarlington@eutelsat.com Cédric PUGNI T: E: cpugni@eutelsat.com 58