newsat limited - australian securities exchange · david ball chief technology officer >20 years...
TRANSCRIPT
NewSat Limited ASX Spotlight Conference 2013
5/23/2013 1
NewSat is Australia’s largest pure-play satellite communications company
• NewSat provides remote and temporary sites with fast, secure and reliable internet, voice, data and video communications via satellite
• NewSat has grown from a “solutions provider” into a “teleport operator”, and through the Jabiru Satellite Program, NewSat will become a global “satellite operator”
• NewSat has the rights to 8 premium orbital slots and its first satellite, Jabiru-1, will launch in 2015
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NewSat overview
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Experienced management team
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
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
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
Mike
Kenneally VP – Satellite Strategy
>30 years global ICT and satellite
experience with Telecom NZ,
Optus, Telstra, Lockheed Martin
Len
McGoldrick
VP – Engineering
& Operations
25 years experience in satellite
operations with
SES New Skies, British Telecom
Andrew
Matlock SVP – Global Sales
>25 years experience in the telco
and technology sectors, including
at Calcomp Inc. (division of
Lockheed Martin)
Adam Shapiro
Chief Financial
Officer /
Company Secretary
>10 years financial sector
experience at
PriceWaterhouseCoopers and
Ernst & Young in assurance and
advisory
Merv
Kuek
SVP – Marketing &
Communications
>10 years marketing and
communications experience,
including Telstra and Crazy
John’s (subsidiary of Vodafone
Australia)
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Current teleport business
NewSat own and operate two Australian teleports that provide coverage to 75% of the globe
Adelaide teleport (South Australia)
• 11 antennas ranging from 2.4 to 13 metres in size
• Up-linking to 8 geostationary satellites across C- and Ku-band • Interconnected to terrestrial fibre networks and internet backbone • Secure Global Access Point supporting certified classified networks
to ensure the transmission of vital and sensitive information for government and enterprise clients
• 24 x 7 x 365 on-site Network Operations Centre
Perth teleport (Western Australia)
• 12 antennas ranging from 2.4 to 13 metres in size
• Up-linking to 9 geostationary satellites across C- and Ku-band • Interconnected to terrestrial fibre networks and internet backbone • 24 x 7 x 365 on-site Network Operations Centre
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As at 31 Dec 2012 Proforma 31 Dec 2012 (post raise)
Assets: $112.7M $234M*
Liabilities: $44.7M $59M*
Equity: $70.0M $175M*
No of shares on Issue: 233,052,157 515,708,507
Market Capitalisation: $121M $220M
*This information is based on the unaudited Statement of Financial Position (Pro Forma Balance Sheet) contained in the NewSat Ltd prospectus dated 25 February 2013. It shows the effect of the Equity Funding
*The Pro Forma Balance Sheet is intended to be illustrative only and will not reflect the actual position and balances as at the date of the Prospectus or at the completion of the Equity Funding.
6
Balance sheet structure
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Orbital slots – A key asset
180 geostationary orbital slots in the world NewSat has acquired 8 premium orbital slots in
perpetuity These are expected to increase in value over
time You cannot launch a satellite without an orbital
slot Able to launch multiple satellites in each slot
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
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Jabiru-1 is a highly flexible satellite
Jabiru-1 Overview Ka-Band Capacity Overview
Ku-band
Ka-band:
spot beams
Ka-band:
regional beams
Ka-band:
steerable beams
(MHz)
Capacity Breakdown
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% 19%
8% 8%
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Exposure to high growth markets
Source Euromonitor International 2012, Informa, ITU
Satellite offers effective, low-cost carriage in NewSat's target markets, which have minimal fixed network infrastructure, and low 3G mobile and internet penetration
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
Worldwide
Total Population: 7.0 billion (4)
Internet Penetration
30%
3G Mobile Penetration
16%
Middle East (1)
Total Population: 227 million (4)
Internet Penetration
24%
3G Mobile Penetration
11%
North-East Africa (2)
Total Population: 376 million (4)
Internet Penetration
14%
3G Mobile Penetration
4%
South-West Asia (3)
Total Population: 267 million (4)
Internet Penetration
15%
3G Mobile Penetration
0.3%
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Growth in emerging markets and Ka-band
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Historical Transponder Usage by Region (1) Global Capacity Demand by Frequency Band
Source Euroconsult
Note: 1. Excludes multispot beam Ka-band demand, which has been relatively small historically 2. 36MHz transponder equivalents
Ka-band is supplementary
Widely used
Broad footprint
Least rain fade
Reliable low bandwidth
Interference from terrestrial systems
Larger earth station antenna required
New spectrum unavailable
C-Band (4-8GHz)
Higher power transmission
More focused beams
Some rain fade / signal attenuation issues
Spectrum saturated
Ku-Band (12-18GHz)
Offers high capacity bandwidth at already occupied satellite positions
Greatest user flexibility
Smaller end-user antenna
Higher frequency
New spectrum available
Some rain fade / signal attenuation issues at the surface
Ka-Band (26-40GHz)
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
Ka-band capacity can operate adjacent to C- and Ku-band frequencies with no interference
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Competitors
NewSat – Good Neighbour, Supplementary Offering, Selling Flexible Raw Capacity
Ka-Band Capacity Outline in Jabiru-1 Footprint
Company Service Offering Footprint Ka-band Ku-band NewSat Competitive Assessment
INTELSAT Leased capacity Middle East / North Africa (limited
coverage)
Single Ka-band transponder being added to some satellites to protect
spectrum filings. Recently announced Intelsat EpicNG project which is
believed to include some multispot beams in C-, Ku- and Ka-band
SES Steerable beam Europe and West Africa Limited Ka-band added to protect filings
May 2012 CEO stated policy to “gently increase” Ka-band capacity
SES / O3B Leased trunking capacity Coverage of visible earth to +/- 45° latitude
Trunking vertical market competitor, particularly in Africa
MEO(1) system, complicated antennas required at each site
Expensive and complex ground segment
EUTELSAT Leased capacity Middle East / North Africa and Central Asia Ka-Sat consumer broadband bundled with TV (not Jabiru target)
Major geographic focus on Europe
INMARSAT Global Express offers
voice & data service
Global Express offering - total cover of
Jabiru catchment, but capacity is spread
evenly over many spot beams
Primarily addressing a different market (maritime) but competitive in
some vertical markets
Global coverage beams offer limited throughput
ARABSAT Leased services Ku coverage Arabian Peninsula. Steerable
Kaband
Primarily consumer broadband focused
Steerable may compete for limited enterprise clients but not military
AMOS 2012 launch Coverage over Middle East and Central
Asia
Potential future competitor – consumer focus but also potential
enterprise market player in Middle East / North Africa and Africa
AVANTI DTH & leased capacity West & Central Europe, small Middle East
overlap Initial consumer market focus (not Jabiru target)
DTH & leased capacity Europe, South Africa, Kenya, UAE,
Afghanistan
Some comparable coverage. Spot beams over Iraq and Afghanistan
(single, isolated beams only)
YAHSAT Consumer services &
some leased capacity Arabian Peninsula and Middle East
City focused, less powerful shaped beam than Jabiru
Steerable may compete for limited enterprise clients but not military
Main thrust is managed services not wholesale capacity
ABS Leased capacity Middle East Limited capability
Wide area regional beam low power compared to Jabiru
AsiaSat Leased capacity Limited coverage Single Ka-band transponder added to future satellite to protect
spectrum filings
Turksat Leased capacity Middle East and Central Asia Limited capability – geographic focus on Caspian Sea region
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Jabiru-1 launch vehicle
Footage courtesy of Arianespace. Ariane 5 launcher carrying a Lockheed Martin A2100 spacecraft
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Jabiru-1 satellite
Footage courtesy of Lockheed Martin. Lockheed Martin Commercial Space Systems A2100 spacecraft being manufactured
16
Experienced partners
Source Lockheed Martin, Arianespace, Export-Import Bank of the United States
Note:
1. ECA funding subject to customary conditions precedent,.
2. Weighted average interest rate based on Ex-Im Bank benchmark Commercial Interest Reference Rate (CIRR) of 1.81%, effective from 15 February 2012. Final interest
rate will be determined with reference to the prevailing CIRR five business days prior to the Financial Close Date for ECA funding
Export Credit Agency (ECA) Debt Financing Providers
(see Appendix for summary term sheet)
~US$400MM facility size for Jabiru-1
Approved by Ex-Im Bank Board (1)
COFACE promesse granted
Weighted average fixed interest rate of ~3.0% (2)
8.5 year amortisation period from commencement of operations
Finance partners
Construction contract signed; preliminary design review (PDR) completed
Jabiru-1 construction commenced and is on schedule
Using proven A2100 series spacecraft platform
Currently 39 A2100 series spacecraft in orbit
Design life 15 years
Over 100 GEO (geosynchronous earth orbit) commercial communications satellites launched
Launch Service Agreement signed
Accounts for over half of all worldwide commercial launches
Using proven Ariane 5 rocket technology
53 consecutive successful launches
300 primary satellites launched from French Guiana operations
Construction and launch partners
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Sources and uses
Sources of Funds (US$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 30 Opex / Non-Satellite Capex 50
Standby Facility 25 Interest During Construction 19
New Equity Issued 105 ECA Exposure Fees 39
Equity Spent to Date 49 Other(2) 41
DSRA 14
Contingency 25
Total Sources ~608 Total Uses ~608
Note:
1. Approximate values shown; ECA funding subject to customary conditions precedent.
2. “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 ($13.4m)
CONFIDENTIAL
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18
Customers & pipeline
Customer Description Existing Customer(s) Potential Size (US$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-1 454
J-2 & J-3 Additional pipeline customers for J-2 and J-3 175 Various
Grand Total 629
Weighted Toward Telco and Govt.
Telco
Government
Enterprise
(Total Contracts + Sales Pipeline = US$1,247MM)
Estimated Sales Pipeline Across Jabiru-1, 2 & 3 – US$629MM
Binding Pre-Launch Contracts – US$618MM
(US$MM)
197
105
13440
67 32 1330
618
0
175
350
525
700
Middle East Telco.
GCC Company
U.S. Comm’s Co.
Ku-band Ka-band Ka-band Ka-band Ka-band Ka-band Ka-band
~18% of Jabiru-1 life of satellite capacity currently
pre-sold
Pre
-Lau
nch
Co
ntr
acts
Sa
les
Pip
elin
e
Tota
l Co
ntr
acts
+ P
ipe
line
Direct-to-Home (DTH)
16%
26%
36%
22%
South Asian Reseller
Ka-band
+
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High Bandwidth data applications expected to drive growth
Enterprise Data Networking
Government and Military Operations
3G / 4G Mobile Backhaul
Reliance on time-sensitive data/connectivity
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)
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
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
Rationale / Opportunity Existing customers / End Users
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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$MM p.a.)
Operating Costs: Fixed, marginal costs expected to be in-line
with standard FSS operating model. Variable costs include insurance
(including in-orbit insurance) and sales commissions
Depreciation: Straight-line over 15 years (deferred until launch)
Teleport & Jabiru-2: Ability to transfer existing supply arrangements to
“owned” capacity on Jabiru-2 will expand margins
20
Established FSS economic model providing significant potential returns
Key Economics of Jabiru-1 Industry Fill Rate (1) and EBITDA Margin (2)
Capacity Pricing Over Middle East (3)
(%)
1.00
1.25
1.50
1.75
2.00
2.25
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Ka-band C-band Ku-band
(US$MM / TPE)
Source Company filings, Euroconsult
Source NewSat analysis, NSR
65%
70%
75%
80%
2006 2007 2008 2009 2010
% Fill Rate % EBITDA Margin
Capacity Utilisation (%)
80% 70% 60%
1.2 220 193 165
1.3 239 209 179
1.4 257 225 193
Weig
hte
d A
vera
ge
Pri
ce p
.a.
(US
$M
M / T
PE
)
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
3. 2008 to 2011 capacity pricing based on NewSat capacity purchasing and additional research across 14 satellites covering the Middle East region. 2012 to 2018 capacity pricing based on NSR GASSD 2009 research covering the Middle East region
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Additional projects – NewSat’s opportunity is scalable
Jabiru-2 Jabiru-3 Jabiru-4
Asset Type Hosted payload (aboard MEASAT-3b) Owned satellite Owned satellite
Target Markets Oil, gas & mining corporates,
government markets
Resources, military, government and
carrier-grade telecom markets
Resources, military, government and
carrier-grade telecom markets
Orbital Slot 91.5°E 89.5°E / 54.0°E 54.0°E / 89.5°E
Capacity 216 MHz
(6 TPE)
3 – 4 GHz
(83 – 111 TPE)
3 – 4 GHz
(83 – 111 TPE)
Bands Ku-band Ka-band Ka-band
Coverage Australia, Timor-Leste and
Papua New Guinea
Africa, the Middle East, Europe, Asia
and Indian Ocean
Africa, the Middle East, Europe, Asia
and Indian Ocean
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NewSat investment highlights
Exposure to High Growth Markets
Early Mover in Ka-Band Supports Value Enhancing Applications Focus
Leveraging Existing Teleport Business Expertise to Execute on Established FSS1 Economic Model
Balance Sheet Anchored by Attractive Export Credit Financing from High Quality Lenders
Highly Experienced Management Team
46% of the first 3 years of Satellite Capacity Sold, with a Promising Pipeline of Blue-Chip Customers
1. Fixed Satellite Services
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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
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