for personal use only - · pdf filefor personal use only. 2 ... currency fluctuations,...

23
UBS Australian Emerging Companies Conference April 20, 2015 For personal use only

Upload: lengoc

Post on 06-Mar-2018

227 views

Category:

Documents


6 download

TRANSCRIPT

Page 1: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

UBS Australian Emerging Companies Conference

April 20, 2015

For

per

sona

l use

onl

y

Page 2: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

2

Disclaimer

The information in this presentation does not constitute financial product advice (nor investment, tax, accounting or legal advice) and does not take account of your individual investment objectives, including the merits and risks involved in an investment in shares in SpeedCast, or your financial situation, taxation position or particular needs. You must not act on the basis of any matter contained in this presentation, but must make your own independent assessment, investigations and analysis of SpeedCast and obtain any professional advice you require before making an investment decision based on your investment objectives. All values are in US dollars (USD$) unless otherwise stated. Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. This presentation contains certain “forward looking statements”. Forward looking statements include those containing words such as: “anticipate”, “estimate”, “should”, “will”, “expect”, “plan”, “could”, “may”, “intends”, “guidance”, “project”, “forecast”, “likely” and other similar expressions. Any forward looking statements, opinions and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice and involve known and unknown risks and uncertainties and other factors which are beyond the control of SpeedCast. In particular, this presentation contains forward looking statements that are subject to risk factors associated with the service provider industry. These statements may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement approvals and cost estimates. Such forward looking statements only speak as to the date of this presentation and SpeedCast assumes no obligation to update such information except as required by law. Forward looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Actual results may differ materially from those expressed or implied in such statements because events and actual circumstances frequently do not occur as forecast and these differences may be material. Readers are cautioned not to place undue reliance on forward looking statements and except as required by law or regulation, SpeedCast assumes no obligation to update these forward looking statements. To the maximum extent permitted by law, SpeedCast and its officers, employees, agents, associates and advisers do not make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of such information, or likelihood of fulfilment of any forward looking statement, and disclaim all responsibility and liability for these forward looking statements (including, without limitation, liability for negligence).

For

per

sona

l use

onl

y

Page 3: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

3

Agenda

SpeedCast Overview

Growth Strategy

2014 Financial Results

Share Price Evolution

Summary & Conclusion

For

per

sona

l use

onl

y

Page 4: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

4

Designs, implements, integrates, operates and maintains predominantly satellite–based communication networks

Serves over 2,000 customers across over 4,000 terrestrial sites and approximately 2,500 offshore rigs and vessels globally

Operates a communications network with global reach, comprised of leased space segment on 41 different satellites and utilizing 28 teleports

A leading operator in the Asia Pacific region and the global maritime and energy sectors — headquartered in Hong Kong

Focuses on tailored solutions to five customer segments: telecom, maritime, natural resources, government & NGO, and enterprise

Overview of SpeedCast A leading provider of satellite-based communication networks and services in the Asia Pacific

region and the global maritime industry

For

per

sona

l use

onl

y

Presenter
Presentation Notes
Messaging to be tailored based on insto familiarity – effectively a placeholder for general introductory remarks Key messages We do not own satellites – we lease capacity Our services are based on configuring satellite communication services for individual customers Detail to be covered throughout the presentation [NB: messaging to be refined - for consideration only in preparation]
Page 5: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

5

SpeedCast provides the necessary infrastructure and capabilities to turn satellite capacity into a useful network service for a wide range of end users

Illustrative SpeedCast VSAT network setup

Remote: Outdoor unit is a signal converter, for converting signals from high to low frequencies, and a signal amplifier fitted to a dish. Transmits to and Receives from the satellite.

Router, modem and server: communicate with the Hub System, manage the routing of various types of traffic and host specific applications for that customer

Teleport: A datacenter and a large “Earth Station”

Data

Video

VoIP Network Management System: the Network Operations Centre Interface to control the Hub System, monitor its activity and report on its performance. Online login also available to customers for observation.

Internet

Hub System: a central IT system to control bandwidth to the many remotes and the traffic within the links

Satellite: SpeedCast leases transponder capacity from satellite operators

Core Router

Cloud

The Managed Network is extendable to the customer’s other sites

What does SpeedCast do? F

or p

erso

nal u

se o

nly

Presenter
Presentation Notes
[not expected to spend too much time on this slide] Key points to bring out No standard product – tailored / customer driven solutions A number of components are brought together SpeedCast differential in the market [NB: messaging to be refined - for consideration only in preparation]
Page 6: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

6

Satellite service providers are a critical link in the satellite industry value chain

Satellite service providers

Consumer market

customers

Satellite operators

Natural resources Telecom Enterprise Broadcasters

Distributors/ network

integrators

Government and NGO Maritime

Pay-television platforms

Broadband platforms

Application developers

Equipment/ hardware

manufacturers

Fibre owners/ operators

Teleport owners/ operators

Technology vendors

End users

Satellite industry value chain

Design, source, install, configure, integrate, operate and maintain

the components required to provide an end-to-end satellite communications solution to end

users

For

per

sona

l use

onl

y

Presenter
Presentation Notes
[not intended to spend too much time on this slide – focus is on the value add of SpeedCast / service providers] A quick snapshot on where we sit in the landscape Our relationship with satellite operators is symbiotic – they typically prefer to operate on a wholesale basis and don’t have the terrestrial infrastructure or the network design, technical support and maintenance capabilities required to provide end users with a working turnkey network service, nor do they have the sales and distribution network to reach widely dispersed end users Satellite service providers, such as SpeedCast, design, source, install, configure, integrate, operate and maintain all of the components required to provide a working satellite communications solution to end users [NB: messaging to be refined - for consideration only in preparation]
Page 7: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

7

Competitive landscape

Asia Pacific VSAT market

Large VSAT service providers

Harris Caprock RigNet

ITC Global PCCW

Patrakom Optus PSN

AST AJN Solusindo Baycom

Plus a large number of smaller domestically focused participants

The markets in which SpeedCast operate are fragmented

A limited number of international operators, such as SpeedCast

No competitor with a regional focus on Asia Pacific that matches the scale of SpeedCast

Maritime

KVH 26%

Inmarsat Solutions

13% Airbus D&S

11% NSSL 6%

Harris Caprock 7%

SpeedCast 6%

MTN 5%

Globecomm 4%

Imtech Marine 3%

SingTel 1%

Telemar 1%

Others 17%

Source: Euroconsult, Maritime Telecom Solutions by Satellite, 3rd Edition (2014)

Approximately 60 providers actively servicing customers

Top 10 VSAT providers account for approximately 83% of installed terminal base — followed by long tail of providers with an installed base of 100 vessels or less

SpeedCast the sixth largest maritime VSAT provider in 2013

Selection of key competitors in SpeedCast’s main Asia Pacific VSAT markets

Maritime VSAT market share in 2013 by number of terminals

Mid-sized VSAT service providers

Smaller VSAT service providers

Note Not an exhaustive list

For

per

sona

l use

onl

y

Presenter
Presentation Notes
Twofold focus with respect to Asia Pacific VSAT 1. Strength of SpeedCast's position in Asia Pacific region 2. Fragmentation of landscape and opportunities it provides With respect to Maritime – focus on the fact SpeedCast is of sufficient scale with a global network capability to benefit from the underlying growth for merchant shipping [NB: messaging to be refined - for consideration only in preparation]
Page 8: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

8

A focus on five key customer verticals

The common theme across verticals — increasing demand for data connectivity as the way business utilise technology changes

Telecom Maritime Natural Resources

Government & NGO

Enterprise

Example customer industries

ISPs Telcos Resellers

Shipping Oil & Gas Government Yachting

Oil & Gas Mining Construction Engineering

Military & Defense

Emergency services

Education Rural

connectivity

Large Enterprises

Banking sector

For

per

sona

l use

onl

y

Presenter
Presentation Notes
Don't need to go into detail on each Key focus is that there are 5x key verticals and revenue is relatively evenly split across them Each of the verticals has unique drivers of demand and unique service requirements but the underlying driver across all is the same – increasing demand for data connectivity [NB: messaging to be refined - for consideration only in preparation]
Page 9: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

9

Carrier grade, high quality global network

One of the largest buyers of satellite capacity globally. Bandwidth requirements are actively managed and scale drives significant operating efficiency.

41 satellites within our network 28 teleport locations 16 sales and support centers Customers in over 60 countries

SpeedCast's satellite network, teleports and offices

For

per

sona

l use

onl

y

Presenter
Presentation Notes
A few points to be made on satellite capacity – likely insto focus principally leased infrastructure leased transponder capacity on 41 different satellites, owned by 15 satellite operators – though AsiaSat is significant 26 teleports HQ in HK Messaging to bring out one of the largest buyers amongst satellite service providers of satellite capacity in Asia Pacific - scale drives significant operating efficiency 70% of proforma service revenue from Asia Pac Australia and PI significant contributors but well placed to drive growth beyond these markets [NB: messaging to be refined - for consideration only in preparation]
Page 10: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

10

Acquisitions

Business model evolution

A significant investment in platform and capabilities

Generalist satellite service provider offering primarily internet access services to the small-medium enterprise market to capitalise on the growing internet usage

Specialised provider targeting larger enterprise customers in specific industries that demand high reliability, significant support and complex, often customised solutions

Ongoing investment in networks, technology enhancement and platforms to provide greater

bandwidth, flexibility and sophistication

Australian Satellite Communications (acquired 2012)

Eletrikom (acquired 2013)

Pactel (acquired 2013)

SatComms (acquired June 2014)

Oceanic (acquired July 2014)

Early days….. Today….. Adaptability

Diverse end markets

Diverse geographies

Enhanced capabilities

Product capability investment

Geolink (acquired Feb 2015; not completed yet)

Hermes (acquired March 2015)

For

per

sona

l use

onl

y

Presenter
Presentation Notes
A lot has changed at SpeedCast since "I" joined 14 years ago – at that point we were a generalist provider for SME – quite product of how we have adapted and evolved to capture the market opportunities that have presented themselves and the scope of our capabilities and product composition today A large part of our evolution has been through capability investment but we've also recognised the benefits of scale and in a fragmented industry have benefited from targeted acquisitions that compliment our offering [NB: messaging to be refined - for consideration only in preparation]
Page 11: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

11

SpeedCast Vision

What SpeedCast will look like in three years time ?

Undisputed leader in satellite service provision in the Asia Pacific region

Top 5 global player

Top 3 global maritime player

Top 3 global energy player

For

per

sona

l use

onl

y

Page 12: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

12

Multiple levers driving sustainable growth

Growth focused strategy

Strong underlying fundamentals High growth end markets Underlying market growth

Strategic acquisitions / bolt-ons in a fragmented market

Highly fragmented markets Track record of M&A execution Cost and revenue synergies

Market share gains in targeted verticals Maritime Energy Partnerships with global telecom operators

Geographic and customer diversification / penetration

Strong strategic position in Asia Pacific from which to grow Existing satellite coverage in Africa and Middle East—following

Asia -Pacific customers wherever they operate Aeronautical market taking off

Continued product innovation and value-added services

In-house product and software development capabilities Established partnerships with technology vendors

For

per

sona

l use

onl

y

Presenter
Presentation Notes
Not a slide to spend much time on Key message here is bench strength and strong team supporting PJ & Mark Reference to Board and you may wish to identify individuals and strength of sector and ASX experience [NB: messaging to be refined - for consideration only in preparation]
Page 13: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

13

Growing data connectivity requirements and low current VSAT penetration in the maritime sector point to sustained future growth.

Operational requirements

Regulatory requirements

Regular updates of electronic navigation maps A communication tool to co-ordinate efforts to tackle piracy

On-board IT systems becoming more complex and remote controlling of ship functions growing

Older communication technologies cannot support applications such as video surveillance

Crew welfare

Access to broadband services for social media, entertainment and phone calls important to attract and retain new generation of seafarers

Maritime growth drivers

0 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Ka-band

Ku-band

C-band

For

per

sona

l use

onl

y

Presenter
Presentation Notes
3 key thematics Moreover, what is SpeedCast seeing on the ground - eg, just signed up [x] and [x] and vessel fit-outs expected to commence shortly; Acquired Elektrikom – scale and profile of merged maritime operations have enhanced the Group's profile and competitiveness in maritime tenders, particularly in Europe and Asia Maritime business performing strongly [NB: messaging to be refined - for consideration only in preparation]
Page 14: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

14

Maritime Customers F

or p

erso

nal u

se o

nly

Page 15: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

15

Enterprise & emerging markets, a sustainable growth engine

Major Growth Areas

Cellular backhaul Satcoms outsourcing for global telcos Emerging vertical segments: Aero & M2M Connecting islands Emerging Asian markets (Myanmar,

Vitenam, Indonesia,…) Geographic expansion – new frontiers

(Africa, South America,…)

Trends Supporting Growth

Overall demand for increased bandwidth Political stability and instability

Enterprise & Emerging Markets

Land revenues outside of maritime/resources account for 57% of SpeedCast business and provide substantial growth opportunity

Aeronautical Satcom In-Service Units by Frequency Band Source: NSR

For

per

sona

l use

onl

y

Presenter
Presentation Notes
Maritime & Energy are undoubtedly the fastest growth engine verticals for SpeedCast Land revenues outside of maritime, energy account for 60% (?) of SpeedCast business and still provide a substantial growth opportunity Major growth areas as follows: Cellular backhaul Connecting islands Emerging Asian markets Emerging market segments: Aero & M2M Major trends supporting growth: Overall demand for increased bandwidth Political stability or instability Geographic expansion
Page 16: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

16

Energy – A powerful additional growth engine

Leverage our Maritime infractructure to further develop a growing market segment − Enhance SpeedCast existing global satellite networks − Bandwidth on existing sites is growing: emergence of the “digital

oilfield” − The Energy sector is one of the largest customers of the satellite

industry

Window of opportunity to gain market share, primarily from Harris Caprock − Need for an alternative service provider following the merger of

Caprock and Schlumberger GCS by Harris − Energy slow down creates a compelling event for customer to

change provider - cost-cutting measures − SpeedCast has a very low market share in the oil & gas sector

We aim to build a major global player

servicing the Energy sector

For

per

sona

l use

onl

y

Page 17: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

17

• Global presence operating in over 60 countries

• Leadership position in Asia-Pacific, including key oil & gas markets (Australia, PNG,…)

• Strong position in the global maritime market

• Key and strategic customer relationship in Houston

• Global C & Ku band network • State-of-the-art 24/7 NOC in Hong

Kong and Sydney • Scale and financial strength

(publicly listed on the ASX)

• Global reach with strong Middle East, Africa, Asia and CIS presence

• Blue chip oil & gas customer base • Innovative value added products

and services • State-of-the-art ITIL compliant

24/7 Network Operation Centre in Europe

• Oil & gas expertise • Service & support in key remote

and challenging locations • Licenses in major oil & gas

countries

An Emerging Global Force in Energy F

or p

erso

nal u

se o

nly

Page 18: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

18

2014 Key highlights

Achieved FY2014 IPO prospectus forecast, thus showing strong growth over 2013

Double-digit revenue growth across services (ex Afghanistan) and wholesale voice

EBITDA margin growth highlighting operational leverage

Investment in key resources for the Maritime and Energy verticals for future growth without sacrificing near-term results

Smooth integration of acquired businesses in particular Satcomms Australia and Oceanic Broadband

Declaration of fully franked AUD3.36 cents per-share dividend for period 1 July 2014 to 31 Dec 2014, in line with prospectus guidance of 40-60% of NPATA

Acquisition of Geolink Satellite Services (Feb-15)

Acquisition of Hermes Datacomms (Mar-15)

87.0

102.9 111.3

121.5

2011 2012 2013 2014

Total Revenue (US$m)

9.5

15.9 17.5

20.7

11%

15% 16% 17%

2011 2012 2013 2014

EBITDA (US$m)

For

per

sona

l use

onl

y

Page 19: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

19

Full year 2014 results

Strong year on year organic revenue growth

despite a more than 50% decline in Afghanistan revenues (USD5.8M churn).

Service revenues (ex. Afghanistan) up 15.5% over 2013.

Equipment sales in line with historical trends

Very strong 38% growth in our wholesale voice business as SpeedCast strengthens its leadership in the Pacific region

US$m Proforma 2014

Proforma 2013

Diff to 2013

Total revenue 121.5 111.3 +9.2%

Service Revenue (ex. Afghanistan) 88.0 76.2 +15.5%

Equipment revenue 12.5 12.7 (1.6%)

Wholesale VOIP 15.7 11.4 +37.7%

Service revenue (Afghanistan) 5.3 11.1 (52.3%)

For

per

sona

l use

onl

y

Page 20: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

20

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

2.60

2.80

3.00

Aug-14 Aug-14 Sep-14 Sep-14 Oct-14 Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15

Shar

e pr

ice,

A$

SDA share price

+43% since IPO

SDA Share price performance since IPO

12 August 2014 IPO price: $1.96

25 February 2015 - FY 2014 Results announcement in line with IPO Prospectus guidance; and - Acquisition of Geolink Satellite Services

16 March 2015 Acquisition of Hermes Datacomms

17 April 2014 Closing share price: $2.80

For

per

sona

l use

onl

y

Page 21: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

21

SpeedCast - Strategic highlights

Strong competitive position 5

A strong and sustainable competitive position

– Global network and infrastructure footprint and relationships – Established brand and reputation – Economies of scale

Strong track record of organic growth 2

A strong track record of revenue and earnings growth – 30% FY2011-FY2014 pro forma EBITDA CAGR

High operating leverage and benefits from increasing scale – Increase in EBITDA margins in FY2011 (11%) to FY2014 (17%)

Fragmented industry dynamics 4

SpeedCast operates in highly fragmented markets, comprised largely of providers focused on either specific countries or particular customer segments

SpeedCast considers that it is well positioned to benefit from future strategic acquisition opportunities as they arise

Demonstrated track record of successful identification, execution and integration

of acquisitions

3 Demonstrated ability to successsfully integrate acquisitions and drive capability and scale benefits

– Three material acquisitions (ASC/Elektrikom/Pactel) in 2012 and 2013 and two small bolt-ons in 2014 (Satcomms & Oceanic)

– Acquisition of Geolink Satellite Services and Hermes Datacomms in 2015

Strong underlying fundamentals and high

growth end markets 1

Growing internet usage globally and additional bandwidth requirements Increasing automation and sophistication of mission critical systems, emergence of the digital oil field Growing focus from governments and international organisations to bridge the "digital divide" Regulatory and operational requirements in maritime driving adoption of services

Highly experienced management team

6 Led by PJ Beylier, who has been with SpeedCast for 14 years, including 10 years as Chief

Executive Officer

For

per

sona

l use

onl

y

Presenter
Presentation Notes
Slide repeated at end of book - not intended to addressed in detail here "Rather than take you through the key highlights up front, why don’t' we come back to that at the end" Suffice to say, we have a business that has been growing very strongly, both as a result of strong underlying market trends and through investing in product capability and bolt-on acquisitions that position us with a strong market position today [NB: messaging to be refined - for consideration only in preparation]
Page 22: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

22

SpeedCast Well Positioned for Sustained Revenue and Profitability Growth

Strong growth potential across SpeedCast’s diverse customer base

SpeedCast will continue to gain in scale and operating leverage

Our industry remains fragmented: there continues to be numerous M&A opportunities to strengthen our growth potential

Experienced management team and Board of Directors to ensure good execution

For

per

sona

l use

onl

y

Page 23: For personal use only -  · PDF fileFor personal use only. 2 ... currency fluctuations, reserve estimates, loss of ... Summary & Conclusion . For personal use only. 4

Thank You

For

per

sona

l use

onl

y