Corporate Presentation Inmarsat plc June 2014

Business Overview

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Market leader in MSS today moving into VSAT markets

   ! Market  leader  

! Global  coverage,  L-­‐band  ! Mission  cri6cal  customer  needs  

! EBITDA  margin  70%  

 

! Entering  established  markets  

! Global  coverage,  Ka-­‐band  ! Future  proof  exis6ng  business  ! Fully-­‐funded  plan  

Strong core business and investment in new growth

Mobile  Satellite  Services  (MSS)  

VSAT  ‘Global  Xpress’  Services  

Today: Tomorrow:

MSS markets !  57%  of  MSS  revenue  

!  190,000  subscribers  !  Drivers:    Ship  management  

   Automa6on  cost  savings  

   Crew  welfare  /  access  

   Smaller  vessel  adop6on  

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Land Mobile

Aviation

Maritime

!  17%  of  MSS  revenue  

!  172,000  subscribers  !  ~60%  government  business  

!  Drivers:    Military  special  ops  

   Interna6onal  aid  agencies  

   Media:  on-­‐the-­‐spot  repor6ng  

 !  15%  of  MSS  revenue  

!  17,000  subscribers  !  ~60%  government  business  

!  Drivers:    Military,  VIP  aircraV  

   Business  jets  

   In-­‐flight  passenger  connec6vity  

!  Market  leader  in  all  sectors  

!  Mission  cri<cal  remote  connec<vity  

!  Safety  services  !  Global  coverage  !  Strong  subscriber  growth  !  Spare  satellite  in  orbit  !  Satellite  life<mes  to  2023  

!  Wholesale  EBITDA  margin  ~70%  

!  Limited  compe<<on  

(1)    Based  on  2013    MSS  revenue  reported  for  Inmarsat  Global    

(1)    

High barriers to entry

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Scale  needed  to  build  a  global  network  and  fund  replacement  satellites  Capital  

Uniform  global  spectrums  rights  now  extremely  challenging  to  secure  and  retain  Spectrum  Rights  

Distribu6on  rela6onships  with  over  600  organisa6ons,  providing  essen6al  global  reach  Distribu<on  

Orbital  loca6ons  can  take  years  to  secure  and  may  not  be  available  Orbital  Slots  

Inmarsat  has  established  market  access  over  33  years  of  opera6ons  Licensing  

33  years  technical  excellence  and  provision  of  global  safety  services    Reputa<on  

Multiple challenges for any new entrant

At least 6 years for a new competitor to enter the market

Network and route to market

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Established model for existing and future services

 Inmarsat  

Government  Inmarsat  Mari<me  

Inmarsat  Enterprise  

Inmarsat-­‐4  satellites                    Inmarsat-­‐5  satellites  

Inmarsat  Solu<ons  

Inmarsat  Global  

MSS  services  

VSAT  services  

Satellite  Network  

Services  PorXolio  

Direct   Channel  partners  

Life<mes  to  2023   Life<mes  to  2028  

Direct  and  Indirect  

Distribu<on  

Customer  Markets  

Direct   Direct  Channel  partners  

Channel  partners  

High-quality end customer base

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Enterprise Maritime

Supplying mission-critical applications to a diverse end user base

Government / Military International Aid

Global coverage

2014

$1.9bn market

size

50 MB/s

$1.6bn cost

3 satellites Ka-band

Global Xpress overview

! Global  coverage  complete  in  2014  

! Future  proof  global  MSS  franchise  

! Expansion  of  ac<vi<es  into  established,  growing  adjacent  VSAT  markets  

! $1.9bn  established  market  opportunity  

! Significant  capacity  pre-­‐commitments    

! 30%  of  cumula<ve  5-­‐year  plan  revenues  secured  

! Distribu<on  agreements  signed  

! $700m  of  financing  from  Ex-­‐Im  Bank  

! Total  cost  $1.6bn  including  spare  satellite  

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World’s first global mobile VSAT service

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Our Strategy Operational progress matched by commercial readiness

!  L-band growth via Inmarsat-4, Alphasat & Inmarsat-6

!  Further growth & diversity via Inmarsat-5 & GX

Safety and redundancy

Capacity and speed

Solutions Ecosystem - driving value-adds for end users

Inmarsat 4 & 6

Core L-band services Highly mobile, agile and resilient

Inmarsat 5

Core Ka-band services High capacity, high speed

!   Empower a high-value solutions ecosystem centred on Inmarsat

! Reorganised for proximity, agility & efficiency

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Business unit structure provides strategy implementation on a market-by-market basis

Maritime VSAT Space

Segment $145m (8%)

Energy VSAT Space

Segment $168m (9%)

Enterprise Consumer

Retail Other

Segments $944m (50%)

US DoD, ROW Gov't commercial

FSS $643m (34%)

VSAT  wholesale  satellite  capacity  purchases  

2010 - $1.9bn* Maritime

VSAT Space Segment $135m (10%) Energy

VSAT Space Segment $152m (11%)

Enterprise Consumer

Retail Other Segments

$576m (42%)

US DoD, ROW Gov't, commercial FSS $502m

(37%)

2008 - $1.4bn*

Global Xpress market opportunity

2008  to  2010  CAGR    •  Mari6me  ~4%  •  Energy    ~5%  •  Government  ~13%  

VSAT  wholesale  satellite  capacity  purchases  

*    $1.4bn  for  2008  and  $1.9bn  for  2010  represent  the  total  VSAT  wholesale  satellite  capacity  purchases  for  the  year  indicated.    These  es6mates  are  based  on  the  Comsys  VSAT  Report  (11th  and  12th  edi6ons,  respec6vely),  taking  total  Service  Revenue  ($5.4bn  and  $7.3bn,  respec6vely)  adjusted  for  managements’  es6mates  of  hardware  revenue,  retail  mark-­‐up  and  value  added  services.      

Historical  growth  rates    •  Mari6me  ~22%  •  Energy    ~9%  •  Government  ~7%  

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Adjacent established markets with growth

Further growth options

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! High  growth  market  opportunity  >$250m  ! Strategic  partnerships  with  SkyWave  and  ORBCOMM  

! Suited  to  L-­‐band  network  ! Compe<tor  market  share  opportunity  ! Significant  product  development  completed  

 

M2M Services

Further growth options

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GX  Avia<on  will  provide  speeds  of  up  to  49  Mbps  to  aircraf,  which  has  the  poten<al  to  support  live  feeds  from  the  internet,  innova<ve  applica<ons  for  the  crew  and  passengers  and  offers  airlines  a  future-­‐proof  op<on  with  broadband  capacity  for  growth    ! 400%  increase  in  connected  aircraf  expected  in  the  next  decade  

! New  global  services  enable  a  whole  new  genera<on  of  affordable  equipment.  

! Upcoming  launch  of  SwifBroadband  HDR;  higher  rate  communica<ons  to  or  from  the  aircraf  

! Upcoming  enhancements  include  SBB  for  helicopters  and  approved  Safety  Services  using  SBB  

In-flight Connectivity

Financial Summary

Financial overview

! Highly  cash  genera<ve  core  business  with  growth  ! Largely  fixed  opera<ng  costs  ! ~70%  core  EBITDA  margin  

! Fully-­‐funded  investment  programme  

! Modest  leverage  at  peak  of  investment  cycle  

! Long-­‐term  dividend  policy  in  place  

! Eight  year  history  of  dividend  growth    

 

 

 

 

 

Free cash flow expansion follows investment phase

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Net debt at 31 December 2013

! Fully-­‐funded  business  plan  ! $1.05bn  of  available  liquidity  •  $750m  undrawn  bank  facility  

•  $144m  cash  on  hand  

•  $156m  Ex-­‐Im  Facility  available  

! $700m  of  12.5-­‐year  Ex-­‐Im  debt  at  3.1%  for  life  

! Senior  debt  rated  BBB  ! Junior  debt  BB+/Ba2  

 

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-200

300

800

1,300

1,800

EIB Facility 2018

Ex-Im Bank 2023

Senior Notes Due 2017

Cash

Convertible Bond 2017

US$m

$850

$544

-$144

$1,799

$329

$220

Net debt Fully funded, low leverage, attractive long-term debt

/ / Group leverage: Net Debt / LTM EBITDA = 2.8x

Appendix

316 332384

432495

556 530 545 562

491 500557

635695

747 755 776 795

0

100

200

300

400

500

600

700

800

900

1,000

0

100

200

300

400

500

600

700

800

900

1,000

2005 2006 2007 2008 2009 2010 2011 2012 2013EB

ITDA

Reve

nues

Maritime Land Aviation

Leasing Other EBITDA

Revenue CAGR: 6.2%

Inmarsat Global record of growth Historical revenue and EBITDA growth

(64%)

(68%)

(66%) (69%)

(71%)

Sector CAGR

2005–2013

Maritime 6%

Land Mobile 1%

Aviation 22%

Leasing 4%

Revenue growth by sector

($ in millions) ($ in millions)

Notes: Other Income excludes revenue from LightSquared. ( ) denotes EBITDA / revenue margin (excluding LightSquared).

(74%) (70%)

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(71%)

(70%)

Maritime market overview

! Commercial  mari<me  market  •  Represents  75,421  vessels  

•  Total  addressable  market  today  20,000  vessels  

•  Only  5,247  have  VSAT  installed  today  

! Other  poten<al  mari<me  markets  •  Fishing:  32,669  vessels  

•  Inland:  18,033  vessels  

•  Leisure:  1,028,000  vessels  

 

 

* Source: Comsys Report, 3rd Edition, 2012

1,071 5,020

11,749

30,717

14,295

7,505

5,064

Commercial Ships by Type*

Passenger

Container

Miscellaneous

Bulk/Dry Cargo

Tankers

O & G Maritime

Pass / Cargo

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Maritime market can grow in MSS and VSAT

XpressLink take-up

! Significant  fleets  commipng  to  XpressLink  ! Mul<-­‐year  agreements  –  five  years  standard  ! >800  installa<ons    ! Total  installed  VSAT  base  1,478  ships  (XL  and  legacy  VSAT)  •  Revenue  >  $70m  pa,  EBITDA  margin  15-­‐20%  •  Significant  and  growing  margin  expansion  opportunity  

!  Acquisi<on  of  Globe  Wireless  to  increase  XL  installa<on  capability  •   Adds  established  Value  Added  Services  capability  

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XpressLink is a market-leading Maritime VSAT service

IsatPhone Pro

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Cumulative net adds since 2011*

* Based on change in billable commercial voice subscribers for each quarter end as reported in Iridium SEC filings on form 10-Q/10-K for the applicable period. Active IsatPhone Pro subscribers for Inmarsat.

! IsatPhone  Pro  >86,000  ac<ve  subscribers  ! >10%  market  share  by  units  ! IsatPhone  outselling  market  leader  ! Reignited  growth  in  land  voice  revenue  afer  years  of  decline  

Taking market share from competitors

IsatPhone 2 ISatPhone Pro

FY 2013 MSS revenue breakdown by sector FY 2013 revenue breakdown by type

2013 revenue breakdown

FY 2013 revenue by business line

Aviation 15%

Leasing 11%

Maritime 57%

Land 17%

Leasing 11%

Data 76%

Voice 13%

Inmarsat Global

Inmarsat Solutions

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Broadband & Other MSS 50%

Inmarsat MSS 50%

Q & A