GILAT SATELLITE NETWORKS COMPANY OVERVIEW · 2020. 1. 8. · ~23.7Tbps 4425Satellites Amazon &...

GILAT SATELLITE NETWORKS

COMPANY OVERVIEWNovember 2019

NASDAQ, TASE: GILT

2 | Proprietary and Confidential

FORWARD LOOKING STATEMENTS DISCLAIMER

Certain statements made in this presentation that are not historical are forward-looking within the meaning of the Private Securities Litigation

Reform Act of 1995. The words "estimate", "project", "intend", "expect", "believe" and similar expressions are intended to identify forward-

looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the

actual results, performance or achievements of Gilat to be materially different from any future results, performance or achievements that may

be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business

conditions, inability to maintain market acceptance to Gilat's products, inability to obtain financing and/or timely develop and introduce new

technologies, products and applications, rapid changes in the market for Gilat's products, loss of market share and pressure on prices

resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key

OEM partners, inability to attract and retain qualified personnel, inability to protect the Company's proprietary technology and risks

associated with Gilat's international operations and its location in Israel. Gilat undertakes no obligation to update or revise any forward-

looking statements for any reason. For additional information regarding these and other risks and uncertainties associated with Gilat's

business, reference is made to Gilat's reports filed from time to time with the Securities and Exchange Commission.

Unaudited/Non-GAAP Financial Measures

This presentation includes financial data that is not audited and financial data that was not prepared in accordance with U.S. Generally

Accepted Accounting Principles (GAAP). Non-GAAP financial measures appearing in this presentation consist of GAAP financial measures

adjusted to exclude, non cash share-based compensation expenses, impairment of goodwill and long lived assets, amortization of acquired

intangible assets, restructuring, trade secrets litigation expenses, tax expenses under amnesty program, deferred tax benefit that was

recorded for the first time and other non-recurring expenses and net income or loss from discontinued operations. Gilat believes these non-

GAAP financial measures provide consistent and comparable measures to help investors understand Gilat’s current and future operating

performance. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable

GAAP measures, and should be read in conjunction with Gilat’s consolidated financial statements prepared in accordance with GAAP.

Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.


GILAT – BOUNDLESS COMMUNICATIONS

MOBILITYMOBILE

Air Land EnterpriseConsumer4G/5G Sea

MOST ADVANCED TECHNOLOGYTerrestrial-grade user experience

END-TO-END SERVICEMost stringent service levels

GLOBAL PRESENCE20 sales offices

BROADBAND

2G/3G

Established 1987 NASDAQ / TASE: GILT ~900 employees


GLOBAL FOOTPRINT – EXPANDING A DIVERSE CUSTOMER BASE

300+ Customers 500+ Networks 90+ Countries

SYSTEM INTEGRATORS

GOVERNMENTS

SATELLITE OPERATORS CARRIERS & SERVICE PROVIDERS


ABUNDANCE CAPACITY – GEO

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

-

100

200

300

400

500

600

700

800

900

1,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GEO-HTS Global Demand GEO-HTS Global Supply Weighted Avarage GEO-HTS Price

Global HTS Bandwidth Supply, Demand and Price per Mbps

$/Mbps/Month Gbps

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

-

100

200

300

400

500

600

700

800

900

1,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GEO-HTS Global Demand GEO-HTS Global Supply

Non-GEO HTS Global Supply Weighted Avarage GEO-HTS Price

~16 times today

Source: Euroconsult, NSR, 2017

ABUNDANCE

OF CAPACITY

UNLOCKS

NEW MARKETS

+ LEO/MEO


INTERNET IS BECOMING A “BIRTH RIGHT”

WE ALL WANT BROADBAND

Everywhere. Anytime. Affordable.Everywhere, Plentiful, Affordable


ACCELERATING CONNECTIVITY – GROWTH AREAS

Mobile

Cellular Backhaul,

Network Resilience, Public Safety

Mobility

In the Air, at Sea, on the Ground

Broadband

Broadband to the

Unserved and Underserved

8 | Proprietary and Confidential8 | Proprietary and Confidential

MOBILE


LEADING THE FAST GROWING 4G/LTE SATELLITE BACKHAUL MARKET

Source: NSR, April 2019

For the first time, Gilat gets to the pole

position in shipment“ “

Being able to differentiate with a

compelling managed service offer is key

to gain business and defend healthy

margins

“ “SATELLITE BACKHAUL MARKET

Service , Equipment & Capacity

$820M

(2018)

$3,790M

(2028)


Market Leader With 35% of Market Share in Modem Shipments




WORLD’S FASTEST BROADBAND FOR LTE BACKHAUL



METRO AREA - A LIVE EXMPLE


MOBILITY


MOBILITY – SUPERIOR PASSENGER EXPERIENCE DRIVES DEMAND

Satellite Broadband Connected Aircrafts

7,200

(2018)

27,800

(2028)


Commercial Aircrafts

~850(2018)

5,300

(2028)


Business Jet Aircrafts


Leading Performance Solutions

for All In-Flight Connectivity Modules

Transceivers

Aero Antennas400Mbps

Modem



The largest single network

GILAT ENABLES THE LARGEST IFC NETWORK

The largest IFC provider with >2,450 aircraftsWorld’s fastest speed

In-Flight connectivity

Global Coverage Over 25 Satellites 16 Teleports

Free Wi-Fi Trend Represent Significant Opportunity for Gilat

~1,500 commercial aircraft installed and activated with satellite

More then 1300 with Gilat Aero modem +850 backlogSep 2019


First project – aero parabolic antenna

Strategic agreement with Tier-1 aviation

service provider

Expansion into business aviation

Best in class product

AERO ANTENNAS - NEXT GROWTH ENGINE

Global Aero Flat Panel Antenna (Cumulative)

“The aero vertical will Generate $8.4B in

cumulative equipment revenues, with

~29,000 units forecasted to be shipped, by

2028”

Source: NSR, Feb 2019

TMA Business Jet Aviation


ESA AERO ANTENNAS - NEXT GEN ANTENNA

Horizon 2020 - Joint Development Project

An established player in the Phased

Array Antenna (PAA) for the defense

(UAV) market

Developing an ESA (Electronically

Steered Antenna)

Won a Technology Demonstrator

project with Airbus

ESA Represents a Significant Growth Engine to Gilat Mobility Business


BROADBAND


LEADING PROVIDER FOR GROUND BROADBAND NETWORKS PROGRAMS

HTS & VHTS

Bridging the digital divide

Connecting communities and

individuals to the world via

broadband

Innovating to deliver plentiful,

affordable Consumer and

Enterprise solutions

Broadband Network

Peru – PRONATEL (FITEL)

projects

A $2B+ program to build

terrestrial

networks across Peru

14 Regional Projects awarded

so far – 6 to Gilat (~$548M)

o ~$333M construction revenue

o ~$215M in operational

revenue over ten years

Target:

Recurring revenues >$50M /

year, profitable, starting 2020


NGSO & 5G


NGSO IS MATERIALIZING

MEO

2,000-10,000 km

GEO 35,786 km

LEO500-2,000 km

SES/O3B~1.2 Tbps

27 Satellites

OneWeb~4.5 Tbps

600 Satellites

Telesat~9 Tbps

512 Satellites

SpaceX~23.7 Tbps

4425 Satellites

Amazon

&

others…

Several constellations in various stages:

SpaceX, OneWeb, Telesat, mPower and

Amazon

Successfully demonstrated:

o IFC demo – Telesat/GEE

o Maritime connectivity demo –

Telesat/Tier-1 Maritime service

provider

o First ever successful demonstration of

5G connectivity– Telesat

Opportunity in Both Baseband and ESA CONSTELLATIONS ARE BECOMING REALITY

Next Growth Engine

HAPs10-50 km


PAVING THE PATH TO 5G

High Speed

Speeds over Gbps

Innovative wideband

technology

Maintaining Gilat’s 4G Superiority on the Path to 5G

PAVING THE PATH TO 5G

Significant Investment in R&D 5G

Low Latency

Order of magnitude reduction in

latency

Leverage our NGSO baseband

FlexibleNetwork

Architecture

Satellite ground segment

integration into 5G eco-system

Utilize SDN/NFV,

Cloud, Edge computing &

Network Slicing


FINANCIAL INDICATORS HIGHLIGHTS


EXECUTING PROFITABLE GROWTH STRATEGY

Annual Revenues Adjusted EBITDA

Revenues: $260M - $270M

GAAP Operating Profit: $23M - $27M

Adjusted EBITDA: $38M - $42M

GAAP Operating Profit

Updated 2019 Management Objectives (US$ millions)

283 266 260-270

2017 2018 2019E

10.9

21.3

23-27

2017 2018 2019E

26.2

35.238-42

2017 2018 2019E


UPDATED 2019 GUIDELINES AND OUTLOOK – INCREASED PROFITABILITYUS$ MILLIONS

Revenues

$260M-$270M ($266.4M)

(2%)-1.4% YoY

Revenues

w/o Terrestrial Infra

$234M-$240M ($241.4M)

(3%)-0% YoY

Mobility Revenues

Mainly IFC

$105M-$108M ($97.2M)

8%-11% YoY

Operating Profit

GAAP $23M-$27M ($21.3M)

Non GAAP $27M-$31M ($25.1M)

Operating Margin

GAAP 9% (8%)

Non GAAP 11% (9%)

Adjusted EBITDA

$38M-$42M ($35.2M)

8%-19% YoY

* Guidance 2019 / (Actual 2018)

Fixed Networks Revenues

including CBH

$128M-$132M ($144.2M)

(11%)-(8%) YoY


GILAT REVENUES & TERRESTRIAL INFRASTRUCTURE BREAKDOWNUS$ millions

205M241M 234M-240M

78M 25M 26M-30M

283M266M 260M-270M

2017 2018 2019E

Fixed & Mobility Terrestrial Infr.


116M144M 128M-132M

88M97M 105M-108M

78M 25M 26M-30M

2017 2018 2019E

Fixed Mobility Terrestrial Infr.

ANNUAL REVENUE PER SEGMENT US$ millions

283M 266M 260M-270M


Q3 2019 PROFIT AND LOSS HIGHLIGHTSUS$ MILLIONS

Revenues

$63.4M ($62.8M)

(1%) YoY

Gross Profit/MarginGAAP $23.3M – 37% ($24.2M – 39%)

Non GAAP $23.3M – 37% ($24.5M – 39%)

Mobility Revenues

$27.1M ($21.8M)

OPEXGAAP $16.3M ($18.2M)

Non GAAP $15.8M ($18.0M)

Operating Profit/MarginGAAP $7.0M – 11% ($6.0M – 10%)

Non GAAP $7.5M – 12% ($6.5M – 10%)

Net Profit

GAAP $6.3M ($8.7M*)

Non GAAP $6.8M ($5.1M)

Adjusted EBITDA

$10.1M ($9.1M)

Fixed Networks Revenues

$27.3M ($34.9M)

Revenues

w/o Terrestrial Infrastructure

$54.4M ($56.8M)

*) in 2019 Net profit includes $4.1M initial recognition of deferred tax assets with respected to carry forward losses

**) Q3-19 (Q3-18)


QUARTERLY PROFIT AND LOSS HIGHLIGHTS US$ MILLIONS, EXCEPT PER SHARE DATA

GAAP Q3 18 Q4 18 Q1 19 Q2 19 Q3 19

Revenues 62.8 69.7 62.1 59.7 63.4

Gross Profit 24.2 26.0 23.6 22.0 23.3

Gross Margin 39% 37% 38% 37% 37%

R&D, net 8.2 8.9 8.3 7.1 7.1

S&M 5.5 5.5 5.9 5.4 5.0

G&A 4.6 4.3 4.9 4.6 4.1

Other income* - (0.2) - - -

Operating income 6.0 7.5 4.5 4.9 7.0

Net income 8.7 5.3 2.8 3.4 6.3

Diluted EPS 0.16 0.09 0.05 0.06 0.11

Non-GAAP**

Gross Margin 39% 38% 38% 37% 37%

Operating Income 6.5 7.9 5.6 6.3 7.5

Net income 5.1 5.7 4.0 4.8 6.8

Adjusted EBITDA 9.1 10.5 8.2 8.9 10.1

* Include trade secrets litigation income

** Adjustments reflect the effect of non-cash stock based compensation as per ASC 718, amortization of intangible assets related to shares

acquisition transactions, amortization of lease incentive, impairments, restructuring costs, re-organization costs, trade secrets litigation expenses (income), tax expense under amnesty program and initial recognition of deferred tax asset with respect to carry-forward

losses


BALANCE SHEET HIGHLIGHTSUS$ MILLIONS

1) Including cash and cash equivalents, restricted cash and net of short term bank credits

2) DSO calculation excludes Terrestrial Infrastructure Projects Segment

3) Q3-19 (Q2-19)

Cash and equivalents1

$84.2M ($69.5M)

DSO2

86 days (83 days)

Total Assets

$358.8M ($365.5M)

Cash From Operation

$17.2M increase

($8.3M decrease)

Total Debt

$8.2M ($8.3M)

Shareholders equity

$228.6M ($223.2M)


IN SUMMARY – UNIQUELY POSITIONED FOR UNLOCKING OPPORTUNITIES

Demand for plentiful affordable broadband, anywhere anytime, is soaring

Investing in product leadership and innovation

Leading in the main growth areas –Mobile Backhaul & IFC Mobility

Oversupply of capacity unlocks new markets

Focused on strategy execution and profitability

THANK YOUGilat Satellite Networks | [email protected] | www.gilat.com

THANK YOUGilat Satellite Networks | [email protected] | www.gilat.com

GILAT SATELLITE NETWORKS COMPANY OVERVIEW · 2020. 1. 8. · ~23.7Tbps 4425Satellites Amazon &...

Documents

Transcript of GILAT SATELLITE NETWORKS COMPANY OVERVIEW · 2020. 1. 8. · ~23.7Tbps 4425Satellites Amazon &...