NewSat Ltd Adrian Ballintine Managing Director

Transcription

1 NewSat Ltd Adrian Ballintine Managing Director

2 ASX Spotlight - Small to Mid Caps Conference February 2013

3 Company overview Development timetable NewSat (ASX:NWT) is Australia s leading independent satellite service provider specialising in global satellite communications Stage 1 Stage 2 Stage 3 Operates as a reseller of third-party satellite capacity using owned Teleports in Adelaide and Perth, Australia 2002 Solutions provider 2005 Teleport operator Satellite operator Provides remote and temporary sites with fast, secure and reliable Internet, voice, data and video communications Established and profitable current business: Market capitalisation of A$250M NewSat s satellite slot portfolio 22% average revenue growth over the last two years EBITDA of A$3.9m, FY12 Jabiru project to transform business from a reseller of satellite capacity to an owner of satellites Expected to create a step-change in earnings and significantly increase EBITDA margins once Jabiru is operational NewSat also holds an attractive portfolio of satellite slots, which NewSat Orbital Slot MEASAT Orbital Slot will form the basis for additional future satellite launches 4

4 Experienced Management Team Adrian Ballintine Founder and CEO >30 years of global technology experience Satellite Experience: 2011 Teleport Executive of the Year and Director of the World Teleport Association Michael Hewins Chief Operating Officer >30 years of executive management experience in global space industry Satellite Experience: AON / International Space Brokers (Chief Commercial Officer), Arianespace David Ball Chief Technology Officer 20 years of experience in satellite and communication sectors Satellite Experience: Intelsat (Managing Director Asia Pacific), PanAmSat William Abbott Corporate Counsel >30 years corporate law experience including capital raising, commercial financing, corporate governance, compliance and enforcement Andrew Matlock VP Sales >25 years experience in the telco and technology sectors, including at Calcomp Inc. (division of Lockheed Martin) Mike Kenneally VP Satellite Strategy >30 years global ICT and satellite experience with Telecom NZ, Optus, Telstra, Lockheed Martin Adam Shapiro Chief Financial Officer / Company Secretary >10 years financial sector experience at PriceWaterhouseCoopers and Ernst & Young in assurance and advisory Len McGoldrick VP Engineering & Operations 25 years experience in satellite operations with SES New Skies, British Telecom Merv Kuek VP Marketing >10 years marketing and communications experience, including Telstra and Crazy John s (subsidiary of Vodafone Australia) 5

5 Existing Industry Knowledge and Networks from Teleport Business Provides Springboard Customer Insight / Solutions Oriented Understand service requirements, transition contracts to owned capacity Military Accredited & Internationally Recognised Existing relationships and service accreditations Supply Side Insight Currently purchase capacity from 7 satellite operators on 10 satellites (1) 6 Note: 1. Includes agreement with MEASAT for hosted payload on Jabiru-2

6 Ka-Band Supplementary to C- and Ku-Band Markets Ka-band capacity can operate adjacent to C- and Ku-band frequencies with no interference C-Band (4-8GHz) Ku-Band (12-18GHz) Ka-Band (26-40GHz) Widely used Broad footprint Least rain fade Reliable low bandwidth Interference from terrestrial systems Higher power transmission More focused beams Some rain fade / signal attenuation issues Spectrum saturated Offers high capacity bandwidth at already occupied satellite positions Greatest user flexibility Smaller end-user antenna Higher frequency New spectrum available Larger earth station antenna required Some rain fade / signal attenuation issues at the surface New spectrum unavailable Uses Uses Uses Full-time TV distribution Contribution feeds Backhaul and VSAT Direct-to-home (DTH) television Satellite news gathering Fixed and broadcast services Backhaul and VSAT Enterprise communication networks Military applications Aeronautical & mobility applications Fixed and broadcast services Backhaul and VSAT Enterprise communication networks Military applications High throughput satellite (HTS) applications Aeronautical & mobility applications 7

7 Jabiru-1 is a Highly Flexible Satellite with Proven Technology Jabiru-1 Overview 8.3GHz capacity: one of the largest commercial communication satellites 7.6GHz Ka-band 648MHz Ku-band Ka-band is proven technology Ka-band satellites have been operating for >10 years. Number of Ka-band satellites has steadily increased in the last 5 years Highly flexible payload: spot, regional and steerable beams Currently under construction by Lockheed Martin Launch date scheduled for mid 2015 Capacity Breakdown (MHz) Ka-band: regional beams Ka-band: steerable beams 19% 8% 8% Ku-band Ka-Band Capacity Overview 24 Spot Beams Concentrates power in a specific location Allow same frequency transmissions in other locations Potential to switch 5 spot beams into high demand regions to provide additional capacity 3 Regional Beams Coverage tailored to serve coastlines or specific areas without including unwanted regions Wider coverage than traditional Ka-band spot beams 2 Steerable Beams Ability to position coverage in areas of high demand anywhere on the visible earth 65% 8 Ka-band: spot beams

8 Experienced Partners to Execute the Project Finance partners Export Credit Agency (ECA) Debt Financing Providers (see Appendix for summary term sheet) ~US$400MM facility size for Jabiru-1 Approved by Ex-Im Bank Board, now subject to equity raise (1) COFACE promesse granted Weighted average fixed interest rate of ~3.0% (2) 8.5 year amortisation period from commencement of operations Construction and launch partners Construction contract signed; preliminary design review (PDR) completed Jabiru-1 construction commenced and is on schedule Using proven A2100 series spacecraft platform Currently 39 A2100 series spacecraft in orbit Design life 15 years Over 100 GEO (geosynchronous earth orbit) commercial communications satellites launched Launch Service Agreement signed Accounts for over half of all worldwide commercial launches Using proven Ariane 5 rocket technology 53 consecutive successful launches 300 primary satellites launched from French Guiana operations Source Lockheed Martin, Arianespace, Export-Import Bank of the United States Note: 1. ECA funding subject to customary conditions precedent, including NewSat contributing ~US$105MM in equity. Refer to Funding Risk in Appendix of this presentation for further information 2. Weighted average interest rate based on Ex-Im Bank benchmark Commercial Interest Reference Rate (CIRR) of 1.81%, effective from 15 February Final interest rate will be determined with reference to the prevailing CIRR five business days prior to the Financial Close Date for ECA funding 9

9 Exposure to High Growth Markets Middle East (1) Total Population: 227 million (4) Worldwide Total Population: 7.0 billion (4) 3G Mobile Penetration Internet Penetration 3G Mobile Penetration Internet Penetration 11% 24% 16% 30% North-East Africa (2) Total Population: 376 million (4) South-West Asia (3) Total Population: 267 million (4) 3G Mobile Penetration Internet Penetration 3G Mobile Penetration Internet Penetration 4% 14% 0.3% 15% Satellite offers effective, low-cost carriage in NewSat's target markets, which have minimal fixed network infrastructure, and low 3G mobile and internet penetration Source Euromonitor International 2012, Informa, ITU 10 Note: Values shown are for 2011 (except internet penetration for 2010) 1. Includes Armenia, Azerbaijan, Cyprus, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Saudi Arabia, Syria, United Arab Emirates and Yemen 2. Includes Burundi, Central African Republic, Chad, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Kenya, Libya, Rwanda, Somalia, Sudan, Tanzania and Uganda 3. Includes Afghanistan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan and Uzbekistan 4. CIA World Factbook, as at 4 February 2013

10 High Bandwidth Data Applications Expected to Drive Growth Existing customers / End Users Rationale / Opportunity Reliance on time-sensitive data/connectivity Enterprise Data Networking Growth in remote oil, gas and mining operations Current customers of teleport business we understand their service requirement Provides connectivity across multiple sites / operating locations Backup for enterprise networks Accredited to provide services to certain Governments / military Increased utilisation of data-rich technologies (e.g. UAV s) Government and Military Operations Increasing Government reliance on private sector Ongoing conflicts in Middle East / North Africa region Small % of operating costs / defence budgets Connectivity across multiple sites (e.g. mobile, airborne, maritime) Critical to data service delivery 3G / 4G Mobile Backhaul Expected growth in mobile data volume / smartphones in emerging economies. Customers seek large bandwidth volumes Limited existing network infrastructure capable of satisfying demands Reliable connection into fixed/fibre networks. Cost effective Ubiquitous rural and remote access 11

11 Sales Pipeline Pre-Launch Contracts Total Contracts + Pipeline Customers & Pipeline + Binding Pre-Launch Contracts US$618MM (US$MM) ~18% of Jabiru-1 life of satellite capacity currently pre-sold Middle East Telco. GCC Company U.S. Comm s Co. Ku-band Ka-band Ka-band Ka-band Ka-band Ka-band Ka-band Estimated Sales Pipeline Across Jabiru-1, 2 & 3 US$629MM South Asian Reseller Ka-band Weighted Toward Telco and Govt. (Total Contracts + Sales Pipeline = US$1,247MM) Direct-to-Home Enterprise (DTH) 22% 16% 26% Government 36% Telco Customer Description Existing Customer(s) Potential Size (US$MM) Status 1 U.S. satellite operator, looking for Ka-band expansion 88 Negotiations well progressed 2 Southeast Asian satellite operator 74 Contract under review, negotiations well progressed 3 Pakistani telco, trunking / backhaul service 72 Reviewing proposal 4 Systems integrator providing Government welfare communications 11 Current Jabiru customer, considering extension 5 Australian based, non-government communications provider 10 Contract under review, negotiations well progressed 6 Systems integrator providing general Government services 8 Reviewing proposal 7 Division of large satellite operator, Maritime / Government applications 7 Reviewing proposal 8 Systems integrator focused on UAV services 5 Reviewing opportunity 9-27 Additional J-1 pipeline customers (including 1 existing teleport customer) 179 Various Subtotal Jabiru J-2 & J-3 Additional pipeline customers for J-2 and J Various Grand Total

12 Weighted Average Price p.a. (US$MM / TPE) Established FSS Economic Model Providing Significant Potential Returns Key Economics of Jabiru-1 Industry Fill Rate (1) and EBITDA Margin (2) Capacity: Jabiru-1 capacity 8.3GHz Expected Year-1 Fill Rate: >60% Industry average 74% ( 06 10A) Pre-sales at a ~30% discount to market Long-term take-or-pay contracts No pre-sales of high value steerable beams (~8% of capacity) reserved to sell on the spot market expected higher pricing Revenue: Jabiru-1 total annual capacity (US$MM p.a.) Capacity Utilisation (%) 80% 70% 60% Operating Costs: Fixed, marginal costs expected to be in-line with standard FSS operating model. Variable costs include insurance (including in-orbit insurance) and sales commissions Depreciation: Straight-line over 15 years (deferred until launch) Teleport & Jabiru-2: Ability to transfer existing supply arrangements to owned capacity on Jabiru-2 will expand margins (%) 80% 75% 70% 65% % Fill Rate % EBITDA Margin Source Company filings, Euroconsult Capacity Pricing Over Middle East (3) (US$MM / TPE) 2.25 Historical Forecast Ka-band C-band Ku-band Source NewSat analysis, NSR 13 Note: 1. Estimated fill rate of transponders in orbit (all lifecycle stages / ages, and excluding HTS capacities) 2. Aggregate EBITDA margin for Intelsat, PanAmSat, SES, Eutelsat and Telesat to 2011 capacity pricing based on NewSat capacity purchasing and additional research across 14 satellites covering the Middle East region to 2018 capacity pricing based on NSR GASSD 2009 research covering the Middle East region

13 Sources and Uses Sources of Funds (US$MM) (1) Uses of Funds (US$MM) (1) Ex-Im Bank Direct Loan 291 Spacecraft & Launch Vehicle 384 COFACE Guaranteed Facility 108 Insurance 36 Mezzanine (2) 30 Opex / Non-Satellite Capex 50 Standby Facility 25 Interest During Construction 19 Proposed New Equity Issue (3) 108 ECA Exposure Fees 39 Equity Spent to Date 49 Other (4) 44 DSRA 14 Contingency 25 Total Sources 611 Total Uses Note: 1. Approximate values shown; ECA funding subject to customary conditions precedent, including NewSat contributing ~US$105MM in equity. Refer to Funding Risk in Appendix of this presentation for further information 2. Minimum mezzanine financing amount of US$30 million, potential to increase to US$40 million, in which case equity component may be reduced 3. Assumes minimum equity raising of US$105 million. Actual range of US$ million 4. Other composed of: refinancing of existing debt ($6.3m), equity placement fees ($8.3m), mezzanine placement fees ($1.8m), ECA co-ordination and advisory fees ($4.0m), standby facility fees ($2.0m), ECA due diligence costs ($3.0m), COFACE facility agreement fees ($2.2m) and orbital slots and project startup costs ($13.4m)

14 Development timeline Milestone Date Fulfilled Acquired seven orbital slots January 2011 P Lockheed Martin construction agreement signed December 2011 P Arianespace launch agreement signed December 2011 P Secured substantial off-take agreement February 2012 P Obtained financing approval from Ex-Im and COFACE June 2012 P Achieved improved financing terms January 2013 P Equity component of of financing package February 2013 P Construction Planned construction completion completion Mid 2015 Satellite Planned launch satellite launch Mid 2015 Positive Planned cash positive flow cash flow FY2016 Launch Planned Jabiru-3 launch and Jabiru-3 Jabiru-4 and Jabiru-4 From

15 NewSat Investment Highlights Exposure to High Growth Markets Early Mover in Ka-Band Supports Value Enhancing Applications Focus ~18% of Life of Satellite Capacity Sold, with a Promising Pipeline of Blue-Chip Customers Leveraging Existing Teleport Business Expertise to Execute on Established FSS 1 Economic Model Balance Sheet Anchored by Attractive Export Credit Financing from High Quality Lenders Highly Experienced Management Team Fixed Satellite Services

16 Thank you Melbourne, Australia Gold Coast, Australia Bangkok, Thailand Perth, Australia Washington DC, USA Dubai, UAE Adelaide, Australia Texas, USA Karachi, Pakistan Sydney, Australia Singapore, Singapore Johannesburg, South Africa

17 NewSat Ltd Adrian Ballintine Managing Director