The satellite value chain
3
Satellitemanufacturers
Satellitelaunchers
Satelliteoperators
TVbroadcasters,
Telecoms,Governments
Consumersand businesses
Business characteristics
4
► High barriers to entry
• Finite resource of orbital positions and frequencies, heavily regulated at international level with key commercial orbital positions have already been developed
• High upfront CAPEX before operations
• High technology & technical expertise through satellite lifecycle
► Robust business model
• Significant backlog with long term contracts generating revenue visibility
• Economies of scale
• High operating margins
• Predictable operating cash flow
Trends in our core businesses
5
► Sustained growth in emerging markets• Robust channel growth• Increasing HD penetration• MENA and SSA leading
growth• Prices well-oriented
► Broad stability in Europe• Broadly stable channel
count• HD and UHD ramp-up • Improving encoding
and compression
VIDEO: MODEST DEMAND GROWTH FIXED DATA: STRUCTURALLY
CHALLENGED
► Global demand driven by increasing connectivity needs
► Large HTS systems adding to existing overcapacity
► Ongoing severe pricing pressure
► More stickiness in certain segments
► US DoD demand stabilizing, albeit at lower prices
► Slower migration to HTS than Data Services
► Opportunities in Europe, Asia and MENA and in non-military
GOVERNMENT SERVICES: POCKETS OF OPPORTUNITY
Low growth In declineBroad stability
Longer-term potential in Video and Connectivity
6
► Satellite and IPTV set to dominate global video distribution in the longer term
► Opportunity to enhance satellite value proposition by offering IP-like viewerexperience
► Outsourcing of services by broadcasters will create additionalsources of demand
VIDEO FIXED AND MOBILE CONNECTIVITY
► Nascent markets with huge potential
► Massive growth in bandwidth usage per consumer
► Medium-term potential in Aero
► Long-term potential in land Mobility
► VHTS and VVHTS satellites are pre-requisites in terms of volume and pricing for mass-market adoption
Video drivers: Channel growth and image quality
7Source: Euroconsult 2016
CHANNEL GROWTH INCREASED IMAGE QUALITY
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
~19,600
CAGR: +2.2%
Predominantly driven by emerging Video markets
TV Channels in EMEA and LATAM
~24,400
38%
24%
16%
21%
14%
4%
9%
16%
81%
78%
52%
46%
35%
19%
32%
42%
NorthAmerica
WesternEurope
CentralEurope
LATAM
MENA
SSA
Russia andCentral Asia
ETL footprint
2025 2015
HD penetration rate by major region
Everywhere, including mature Video markets
Video drivers: Capacity requirements versus compres sion technology
8
EVOLUTION OF IMAGE QUALITY (NUMBER OF CHANNELS)
NUMBER OF CHANNELS PER 36 MHZ TRANSPONDER
Source: Euroconsult 2016, EMEA and LATAM
Ramp-up
Format Modulation MPEG-2 MPEG-4 HEVC
1990s-2000s
SDDVB-S 12 20 -
DVB-S2 - 26 -
2000s-2010s
HDDVB-S 2 to 3 5 -
DVB-S2 3 to 4 6 to 8 12 to 15
2020s UHD DVB-S2 1 to 2 3 to 40
5 000
10 000
15 000
20 000
25 000
2015 2017 2019 2021 2023 2025
Standard Definition High Definition Ultra High Definition and 3D
Video: Satellite’s competitive advantage over OTT / IP
9Source: Eutelsat analysis, European Commission - Broadband Coverage in Europe 2015, CISCO VNI 2015
► Satellite a fraction of TV platforms operating costs
► CDN costs rise in line with audience growth
► For a large Pay-TV platform, OTT distribution would be much more expensive than satellite
COST-EFFICIENCY UNIVERSAL REACH
► High cost of fibre roll-out
► Terrestrial networks cannot reach entire population
• Lower image quality
• Or even no service
SERVICE QUALITY
BROADBAND COVERAGE (>30Mbps)
► Higher quality of image leadingto increased bandwidth usage
► Congestion of terrestrial networks
• Video will represent ~80% of consumer internet traffic by 2019
88%
41% 44%
UK France Italy
4
8
20
1 SD channel in MPEG 2
1 HD channel in MPEG 4
1 UHD channel in HEVC
BANDWIDTH REQUIREMENT (Mbps)
Cost
Satellite
OTT
# viewers
Satellite more cost efficient >50k viewers in Western Europe
Satellite provides full coverage of a market
Satellite and hybrid solutions give unimpaired viewing experience
Video: Satellite resilience in Western Europe
10
► Slight increase in total number of TV homes 175 million
► Satellite reception stable at 50 million homes
► Satellite market share of 29%
► IP gaining share against terrestrial, not satellite
MILLION TV HOMES BY DISTRIBUTION MODE IN WESTERN EUROPE
58 53 52 50
4743 42 42
12 26 28 33
49 50 50 50
166 172 172 175
2010 2015 2016 2021
Source: Euroconsult, Digital TV Research
Terrestrial Cable SatelliteIP
10
IP GAINING SHARE VS. TERRESTRIAL, NOT SATELLITE
Video: Satellite gaining market share worldwide
11
► Total number of TV homes to increase by 95 million to 1.7 bn by 2021
► Satellite reception to grow by 50 million homes to 430 million by 2021
► Satellite market share to rise from24% to 26%
MILLION TV HOMES BY DISTRIBUTION MODE - GLOBAL
Source: Digital TV Research, June 2016
Terrestrial Cable SatelliteIP
11
618514 503 471
528560 563 580
36 124 143 199
267370 379
4321449
1568 15881682
2010 2015 2016 2021
Agenda
12
2
3
5
1 FSS Industry
Eutelsat in a snapshot
Q1 2017-18 performance
Appendix
4 Outlook
2
12
Eutelsat in a snapshot
13Data as of 30 June 2017 except for breakdown of revenues by geography which is a 30 June 2016.
► Revenues of € 1.48bn
► Fleet of 39 satellites; global coverage
► Operating >1,370 transponders
► Broadcasting >6,600 channels
► Backlog of €5.2bn, representing3.5 years of revenues
KEY DATA REVENUE BREAKDOWN BY APPLICATION
64%12%
12%
7%5%
Video
Fixed Data
Government Services
Fixed Broadband
Mobile Connectivity
31%
8%
23%
5%
10%
11%
7%5% Western Europe
Central Europe
MENA
RCA
SSA
Americas
APAC
Unallocated and others
By geography
By application
Breakdown of revenues by Application
14
Video 65%
Fixed Data 11%
GovernmentServices 12%
FixedBroadband 7%
Mobile Connectivity 5%
CO
RE
BU
SIN
ES
SE
SC
ON
NE
CT
IVIT
Y
Direct-to-Home (DTH)Cable headendsProfessional Video
Mobile backhaulCorporate networks
MilitarySecurity
Internet access for households and corporates
In-flight ConnectivityMaritime Connectivity
As of 30 Sept 2017. % of revenues excluding Other revenues
Financial structure
16
► Net Debt/EBITDA ratio at 3.2x
• Reduced from 3.4x at 30 June 2016
► Average cost of debt after hedging of 3.1%
• Reduced from 3.5% in FY 2015-16
► Repayment of Mar 17 bond to generate €30m savings in FY 2017-18
NET DEBT / EBITDA RATIO 1
3.43.2
30 June 2016 30 June 2017
1Based on net debt at the end of the period and last twelve months’ EBTIDA
Bond and Bank Debt maturity schedule
171With 2 possible extension facility of one year subject to lenders agreement
2019 2020 2021 2022
ONGOING DEBT OPTIMISATION DEBT MATURITY SCHEDULE
► One year extension of €600m term loanand €200m revolving credit facility
► Refinancing of €450m revolving facility
► 2019 and 2020 bonds mid-swaps pre-hedged
► Average debt maturity of 3 years
Note: Maturities are provided on a calendar year
Term loan / undrawn line of creditsof Eutelsat Communications
Undrawn lines of credit(Eutelsat S.A)
Outstanding Bonds
€800m
Pre-hedge: €800m at c. 1.45%ex. spread
Pre-hedge: €500m at c. 1.12% ex. spread
€930m
€500m
€300m
€450m1
€600m
€200m
2.625%
3.125%
1.125%
5.0 %
Shareholder structure
18
EUTELSAT SHAREHOLDING STRUCTURE AS OF 30 JUNE 2017
Bpifrance26.4%
CIC1
6.7%
FSP2
7.5%
Free float and
others59.4%
1 China Investment Corporation
2 Fonds Stratégique de Participations
Key events
20
First Quarter revenues of €349m
Well-oriented operational metrics: stable Backlog r ising Fill Rate and increased HD penetration quarter on quarter
Positive outcome of Video renewals, notably with Po lsat at HOTBIRD
Favourable USG Fall campaign with almost 95% renewa l rate
Al Yah 3 delay impacting African broadband roll-out
Streamlining of Video distribution in MENA with int egration of Noorsat
385
349
(5)(6)
(21)(4)
ReportedQ1 2016-17
Currency Perimeter Change inOther
Revenues
Operationaltrend
ReportedQ1 2017-18
Q1 Revenues
21
Q1 YOY REVENUE BRIDGE (€M)
► Q1 revenues of €349m• -9.3% reported• -6.7% at constant perimeter and
currency
► Underlying businesses down 1% excluding ‘Other’ revenues
-1%
Q1 Revenues like-for-like by application
22
Video
REVENUECONTRIBUTION1
REVENUES(€m)
LIKE-FOR-LIKE 2 CHANGE
65% 223 -0.8%
1 The share of each application as a percentage of total revenues is calculated excluding “Other revenues”.2At constant currency and perimeter. Based on new applications reporting.
Fixed Data 11% 37 -11.7%
GovernmentServices 12% 41 +1.1%
FixedBroadband 7% 22 -9.7%
Mobile Connectivity 5% 19 +33.3%
CO
RE
BU
SIN
ES
SE
SC
ON
NE
CT
IVIT
Y
Other revenues 7
YoY QoQ
+0.7%
-4.7%
-2.0%
-3.5%
+5.1%
-74.8% +14.7%
Video
23
► Revenues of €223m, down 0.8% y-o-y like-for-like 1
► Broadcast up 0.5% excluding carry-forward impact of termination of TV d’Orange contract:• Growth in Russia at 36° and 56° East• And MENA at 7/8° West and 7° East
► Renewal with Polsat at the HOTBIRD position
► Ongoing tough conditions in Professional Video
► 6,755 channels at end-Sept. 2017• +6.6% y-o-y• HD up from 14.8% to 17.9%
REVENUES2 (€M)
227 223
229
228
224
FY 2016-17 FY 2017-18
Q1
Q2
Q4
Q3
Q1
908
1 At constant currency and perimeter2 Proforma revenues reflecting new applications at actual rates as well as the disposal of DSAT Cinema for FY 2016-17
Fixed Data
24
► Revenues of €37m, down 11.7% y-o-y like-for-like 1
► Ongoing tough environment in all geographies
► Continued price pressure
REVENUES2 (€M)
43 37
41
42
41
FY 2016-17 FY 2017-18
Q1
Q2
Q4
Q3
Q1
168
1 At constant currency and perimeter2 Proforma revenues reflecting new applications at actual rates
Government Services
25
► Revenues of €41m, up 1.1% y-o-y like-for-like 1
► Stabilization of revenues reflecting solid commercial performance in FY 2016-17
► USG Renewal rate at almost 95% in Fall round• Volumes almost stable• Slight decline in price
REVENUES2 (€M)
42 41
44
45
45
FY 2016-17 FY 2017-18
Q1
Q2
Q4
Q3
Q1
176
1 At constant currency and perimeter2 Proforma revenues reflecting new applications at actual rates
Fixed Broadband
26
► Revenues of €22m, down 9.7% y-o-y like-for-like 1
► Y-o-Y variation reflecting mainly the absence of a one-off last year:• Related to the phasing of payments by
a specific customer
► Definite delay to launch and entry intoservice of Al-Yah 3:• Commercial service now expected in
June 2018 at the earliest;• Marketing partly suspended, affecting
Al Yah 2 operations; • Majority of revenue expectations for
Konnect Africa pushed out to 2018-19.
REVENUES2 (€M)
25 22
24
24
23
FY 2016-17 FY 2017-18
Q1
Q2
Q4
Q3
Q1
96
1 At constant currency and perimeter2 Proforma revenues reflecting new applications at actual rates
Mobile Connectivity
27
► Revenues of €19m, up 33% y-o-y like-for-like 1
► YoY variation reflecting:• Full-quarter impact of Taqnia contract• Continued growth on Widebeam
capacity with customers includingGogo, Hunter and Panasonic
► Revenues to benefit from entry intoservice of EUTELSAT 172B in November• Full impact from Q3 onwards
REVENUES2 (€M)
15 19
18
17
19
FY 2015-16 FY 2016-17
Q1
Q2
Q4
Q3
Q1
69
1 At constant currency and perimeter2 Proforma revenues reflecting new applications as well as the disposal of Wins/DHI at actual rates
Backlog and Fill Rate
28
BACKLOG (€BN) OPERATIONAL AND LEASED TRANSPONDERS
4.6 4.4 4.5
0.8 0.8 0.7
5.4 5.2 5.2
30 September2016
30 June 2017 30 September2017
► 3.5 years of revenues
► Sequential increase in Video backlog
► Video accounting for 86%
1,327 1,372 1,374
948 931 940
30 Sept. 2016 30 June 2017 30 Sept. 2016
Operational transponders leased transponders
Based on 36 MHz-equivalent transponders (TPE), excluding HTScapacity
71.5% 67.9% 68.4%Fillrate
► Operational txp unchanged Q-o-Q
► Leased txp up by 9 units Q-o-Q
► Fill rate of 68.4%
Video
Agenda
29
2
3
5
1 FSS Industry
Eutelsat in a snapshot
Q1 2017-18 performance
Appendix
4 Outlook
2
3
4
Reminder: Our strategic roadmap
30
GROW CASH-FLOW
STEP 1 STEP 2
GROW TOPLINE
2017-19
2019-2025+
Maximise Free-Cash-Flow generation
Build on our core video business
to accelerate growth
Capture longerterm potentialin Connectivity
2016-2019
Maximize free-cash-flow: Financial measures
311 Savings vs. FY 2015-16 basis
► Implement ‘design to cost’ approach
► Ground capex under strict control
CAPEX REDUCTION
► €500m bond issue at 1.125% coupon• Refinancing of €850m Mar. 2017 Bond (4.125% coupon)
► Swap-lock ahead of 2019 €800m bond• Locked at c. 145 bps, (-90 bps)
► Swap-lock ahead of 2020 €930m bond • €500m locked at c. 112 bps
► Streamlining the asset portfolio: agreement reached with Abertis for Hispasat stake (€302m)
► Improving working capital through DSO optimization
► Launch of « LEAP », a wide-ranging cost-savings plan with a focus on external costs
OTHER MEASURES
“LEAP” COST-SAVINGS PLAN
Average annual cash Capex reduced by >€80m 1
Annual savings of c.€30m from 2017 onwards, c.€50m
from 2019 1
Annualised savings of €30m by FY 2019 of which €15m in FY 2018 1
OPTIMIZATION OF COST OF DEBT
Build on our core Video business to accelerate grow th; capture longer term potential in Connectivity
32
► Optimize existing assets within a limited current addressable market
► Progress on prerequisites for scalability
► Decide on scale and location of investments
► Use existing assetsto anchor footholdin the market
► Selectively investin capacity to improve coverage
► Pave the wayfor Mass market
► Growth potential of Video
► Opportunity for further value creation
► Harnessing technology
VIDEOFIXEDBROADBAND
MOBILECONNECTIVITY
MEDIUM TERM(FROM FY 2019)
LONG TERM(FROM FY 2021)
Build on our core business to accelerate growth
Preparefor scalability
From nicheto mass market
Video: Build on our core business to accelerate gro wth
33
► Video via satellite will continue to grow
► Distribution will be split between satellite and IPTV longer term
► Outsourcing of services by broadcasterswill create additionalsources of demand
GROWTH POTENTIAL OF VIDEOOPPORTUNITY FOR FURTHERVALUE CREATION
► Greater integrationwithin the IP ecosystem
► Enhance viewerexperience
► Add new servicesfor broadcasters, advertisersand consumers
► Develop connectedterminals
► Improve efficiency• Compression• Encription• Security
► Increase revenue• Metadata management• Targeted advertising• Payment
► Enhance loyalty• Multiscreen• Smart EPG• TV everywhere
HARNESSING EXISTING TECHNOLOGY
Enhance end-viewer experience to reinforce customer loyaltyand generate additional revenue opportunities
Connectivity: Agreement with ViaSat…
34
► Combining Eutelsat’s European broadband business with ViaSat’sexpertise
► Two entities:
• Infrastructure (51% Eutelsat)• Retail (51% ViaSat)
► ViaSat paid €132.5m for 49% of European Broadband business
CLOSING OF JV AGREEMENT WHAT’S NEW?
► Initial JV perimeter extended to include both Fixed Broadband AND in-flight Mobility
► Initial technical assessment of Viasat3 VHTS technology successfullycompleted
► ViaSat-3 EMEA satellite expected to be added to the joint venture
► Platform to drive growth acceleration in Connectivity vertical from early 2020s
…paving the way for the longer-term opportunity
35
► Core market for Fixed Broadband via satellite estimated atc.5m households in Europe in 2030 1
► Global revenues for in-flight Connectivity capacity expec ted toexceed €1bn in 2025
Significant long-term potential
VHTS game-changing
technology
Springboard for growth rebound
from 2020
Managed withincurrent capex and
profitabilityframework
► Provision of fibre-like service
► Production costs enabling transition from niche to mass market
► Early mover advantage
► Strong technology partner
► Combining ViaSat’s distribution know how and Eutelsat ’sestablished positions and ‘go-to-market’ experience
► Shared Investment with ViaSat
► KA-SAT funds earmarked for VHTS investment
► Eutelsat retains an infrastructure business model with noimpact on margins
1 Households with Fixed Broadband connection below 10 Mbps and no indoor LTE coverage
Progress on our priorities for FY 2017-18
36
Stabiliserevenues
Optimiseother items
Polsat renewal with favourable outcome
Deliver on LEAP cost-savingsplan
Maintain tension on WCR
Contain Capex
Continue to de-lever
Gro
w C
ash
Flo
w
Grow Connectivity
Return to broad stability at HOTBIRD
Stimulate HD ramp-up and optimise Video distribution
HD penetration up c. 3 pts in Q1Integration of Noorsat
Fill Data capacity Some improvement in volume trendsMobile Connectivity up 33% in Q1OSD of E172B on track for Q2
Konnect Africa ramp-up Pushed out due to Al Yah 3 delay �
All on track
2017-18 revenue path back-end loadedY-o-Y revenue trend to improve in future quarters
37
► Comparison base to becomeeasier in coming quarters• Lower ‘Other’ revenues• End of TV d’Orange on 31 Dec. • Easier comps for Fixed Data
► Uplift from EUTELSAT 172B in Q2• HTS payload partly presold to
Panasonic• Full-quarter impact from Q3
QUARTERLY PROFORMA REVENUES IN FY 2016-17
352 356 357 353
27 147 6
379370 364 359
Q1 Q2 Q3 Q4
Other revenues
Financial outlook
38
1 Based on Proforma revenues of €1472m for FY 2016-17 excluding the contributions of Wins/DHI and DSAT ; 2 Inc. cash outflows related to ECA loan repayments and capital lease payments; 3 Net cash-flow from operating activitiesless Cash Capex less Interest and Other fees paid net of interest received. Three year CAGR calculated on the period FY 2016-17 to FY 2019-20 .
REVENUES(At constant currency, and perimeter)
EBITDA MARGIN(At constant currency)
CAPEX
LEVERAGE
► -1% to -2% in FY 2017-18 1
Versus ‘broadly stable’ previously► Return to slight growth from FY 2018-19
► Above 76% in FY 2017-18 ► Above 77% from FY 2018-19
► FY 2017-18 to FY 2019-20: average of €420m 2 per year
► Investment grade rating► Net debt / EBITDA below 3.0x
DISTRIBUTION ► Stable to progressing dividend
DISCRETIONARY FREE CASH FLOW 3
(At constant currency)
► FY 2016-17 to FY 2019-20: mid-single digit CAGR, with growth back-end loaded in the outer two years
Future launches
39
NameEUTELSAT
7CEUTELSAT5 WEST B
AFRICAN BROADBANDSATELLITE
OrbitalPosition
7° East 5° West TBD TBD
Launch date 1 H2 2018 H2 2018 2019 2019
Manufacturer
Launcher
CoverageMENASSA
EuropeNorth Africa Flexible SSA
Applications Video Video Government Services Broadband
Total Capacity (TPE/Spotbeams)
49 Ku 35 Ku N/A 65 Ka / 75 Gbps
o/w ExpansionCapacity 2
19 Ku - N/A 65 Ka / 75 Gbps
1 Calendar year2 Excludes unannounced redeploymentsElectrical propulsion HTS Payload
Agenda
40
2
3
5
1 FSS Industry
Eutelsat in a snapshot
Q1 2017-18 performance
Appendix
4 Outlook
2
3
5
FY 2016-17 Revenues of €1.478bn, -2.2%like-for-like
42
Video
REVENUECONTRIBUTION1
REVENUES2
(€m)LIKE-FOR-LIKE 3
CHANGE
64% 908 -3.3%
1 The share of each application as a percentage of total revenues is calculated excluding “Other revenues”.2 Total revenues of €1478m also include Other revenues of €55m 3At constant currency and perimeter and excluding non-recurring revenues. Based on new applications reporting.
Fixed Data 12% 168 -14.0%
GovernmentServices 12% 176 -4.1%
FixedBroadband 7% 96 +18.4%
Mobile Connectivity 5% 75 +22.5%
CO
RE
BU
SIN
ES
SE
SC
ON
NE
CT
IVIT
Y
Profitability
43
► EBITDA margin rising to 76.7% despite lower revenues• 76.6% at constant currency
► First benefits of early cost-cutting actions
► Lower level of bad debt
► Positive impact of disposal of non-core, lower margin businesses (Wins/DHI)
EBITDA (€M)
77.4 77.4 77.5
Margin (%)
1,165 1,134
FY 2015-16 FY 2016-17
76.2 76.7
Net income
44
1Rounded to closest million2EBITDA defined as operating income before depreciation, amortisation, impairments and other operating income/(expenses)
FY 2015-16
FY 2016-17 Change
Revenues
EBITDA2
Operating income
Financial result
Income tax
Income from associates
Group share of net income
Extracts from the consolidated income statement in €m 1
1,529 1,478 -3.3%
1,165 1,134 -2.7%
662 615 -7.1%
(123) (131) +6.4%
(200) (120) -39.9%
24 0 n.a
348 352 +0.9%
► Higher D&A ► Capital gain on Wins/DHI
► Full-year impact of EUTELSAT 36C lease► Lower capitalized interest► Variation in forex impact
► Partial tax-exemption of Wins/DHI capital gain► Non-cash positive one-off related to future tax rat e
cut in France
► Hispasat reclassified in assets held for sale
► Net margin of 24%
Discretionary Free-Cash Flow up 65%
45
1
(1) Cash Capex includes capital expenditure and payments under existing export credit facilities and long-termlease agreements on third party capacity.
(2) Cash Capex for FY 2016-17 is: (i) restated from the value of the payment owed in FY 2015-16 to RSCC inrespect of lease of EUTELSAT 36C but paid effectively in FY 2016-17 (payment of €95.2m) which was alreadyaccounted for in FY 2015-16 cash capex; (ii) net of the €132.5m received from ViaSat.
(1)
983
(414)
(161)
408
Net cash Flow from operations
Cash Capex Interest and Other fees paid net of
interests received
Discretionary Free Cash-flow
In €m
(1)
896 (514) (134) 247FY 2015-16
+ 87 +100 -27 +161Change
+65%
Net debt down €366m
46
4,007
3,641
(408)+266 (55)
(140) (29)
-€366m
Net Debt at end- June 16
Net Debt at end-June 17
DiscretionaryFree Cash
Flow
Dividendspaid
Other
In €m
Equity divestments
46
Change in financial
leases and ECA
1Excluding Payment of €95.2m to RSCC already reflected in Discretionary cash flow
1
225290
Sept. 2016 Sept. 2017
Focus on HOTBIRD KPIs
4848
1,044
1,016
Sept. 2016 Sept. 2017
+15
End of TV d’Orange
OthersResilientchannel count
-43
Sustained HD ramp-up
+29%
MPEG-4 more advanced than HD
500 544
Sept. 2016 Sept. 2017
Penetration 21.6% 28.5%
Penetration 47.9% 53.5%
+9%
Evolution of used capacity at HOTBIRD
49
► Positives
• HD penetration to reach 50%
(vs. c. 25% today)
• >20 UHD channels (vs. <5)
► Negatives
• Reduction in simulcast
(from 10% to 5% of total channels)
• Efficiency gains
(coding, modulation, compression)
KEY TRENDS BY FY 2021 EVOLUTION OF CAPACITY USED
100 109(20)
(17)
+37
+9
FY 17 SD channelreduction
Efficiencygains
HD channelincrease
UHDchannelincrease
FY 21
► New pricing model based on ‘Mbps’
Increase in Mbps used => revenues at least stable
Sensitivity: a variation of 10 channels wouldhave a 1 point impact on capacity used
In Mbps (base 100 in FY 2017)
Acquisition of Noorsat: Streamlining Video distributi on
501 annualized basis net of capacity purchased by Noorsat from Eutelsat
► Increase our control over the commercial development of MENA Hotspots
► Increase our direct access to the end clients: • Boost HD adoption • Upsell incremental Video Services
► Leverage on salesforces for cross-selling
► Internalize the distribution margin
Noorsat in a snapshot
INCREASE DIRECT CUSTOMER ACCESS BY INTEGRATING DISTRIBUTION
► One of the largest distributors of video in MENA
► c. 300 channels
► Blue chip customers
Financial impacts
► Acquisition price of c. 75 M$► > $15m on revenues 1
► Slightly dilutive margin impact absorbed within objectives
► -€0.4bn on backlog
Video Case study: Development of hybrid offer in South Korea
51Source: Eutelsat analysis, company reports
KT MEDIA SUBSCRIBERS (M)
► South Korea is one of the countrieswith the highest fiber penetration
► KT Telecom hybrid offer launched in August 2009 combining IPTV with DTH
• Part of a triple play offer including broadband and Voice over IP
► Differentiated services offering
• Wide range of linear channels including HD channels (from satellite TV)
• Significant VOD contents (from IP offer )
► After adopting the hybrid platform KT was perceived to be superior to cable TV or competitor IPTV
• Became a leading IPTV player
2.15
0.84
1.55
9.71
2.43
1.94
5.35
2011
4.55
2017
Olleh TV(IPTV)
Skylife TV(satellite)
Olleh TV Skylife(hybrid) Satellite
Satellite prospering in the land of fiber
VIDEO
► Eutelsat’s number one Video market
► Unrivalled distribution cost
• Eg: Sky It is paying c.€90m /year to distribute260 channels to 4.8 M households
• This represents c.7 cents per channel per household per year
► Low terrestrial infrastructure penetration
► Sky Italia available via Telecom Italiaterrestrial since 2015
► Sky Satellite subscribers have risensince then
SKY ITALIA SATELLITE SUBSCRIBER DEVELOPMENT
52Source: OECD, Sky reports
Sky Italia retail customers, in ‘000 subs
Video via satellite: Italian market focus
4,833 4,760 4,734 4,700 4,809
Dec12 Dec13 Dec14 Dec15 Dec 16
Launch of OTT
Fixed Broadband: Preparing for mass market adoption
53
BRIDGE DIGITAL DIVIDE
IN-MARKET PROPOSITION INDUSTRIAL TRANSLATION TIMING
Use the time to VHTS to prepare for mass market: op timize existing or committed assets(KA-SAT, Russian and African Broaband) and validate go-to-market models
► Deliver fiber-like capacity (30 Mbps)
► Reach fiber-like pricing (€40 / month)
► Lower barrers to adoption
► Assess adressable market
► Develop appropriatedistribution
► VHTS satellites€1m / Gbps
► Terminals < $200
► Refine assessmentof fiber deployment
► Test and validatebusiness models
► 2020-21
► C.2019
► 2018 onwards
► 2016-18
Mobile Connectivity: M arket foothold with existing assets
54
BRING FIBER-LIKE CONNECTIVITY IN MOBILITY
IN-MARKET PROPOSITION INDUSTRIAL TRANSLATION TIMING
Pave the way by leveraging our existing assets in A ero (172° East, 10° East, 117° East, KA-SAT),selectively invest to improve coverage, and seek pa rtnership deals with stakeholders for each vertical
► Deliver streaming-like experience for IFEC
► 1 Mbps / passengerfor 50% of passengers
► Deliver on-the-movefiber-like Connectivityfor ground transportation
► VHTS satellites1 Terabyte satellite
► VVHTS
► Flat terminals
► 2020-21
► 2025-2035+
Strong pipeline for in-flight Connectivity
55
► Several contracts signedusing capacity on KA-SAT over Europe• Finnair
• SAS
• El Hal
• Icelandair
► Eutelsat providessatellite capacity, ViaSatis the prime contractor
KA-SAT EUTELSAT 172B
► Customised HTS payload selected by Panasonic to support IFEC growth over APAC
► Panasonic to use alsowidebeam capacity to deliver live TV to aircrafts
► Contract with Taqnia for four HTS Ka-band spotbeams on ETL 3B • Capacity to be used for 100
medium / long-haul aircraft of Saudi Arabian Airlines
► Several contracts for the use of widebeam capacity by major service providers
OTHER RESOURCES
Eutelsat Quantum: Cutting-edge technology
56
► Software-defined class of satellites
► First satellite to be launched in 2019
• Manufactured by Airbus Defence and Space
► Incomparable flexibility in terms of:• Coverage
• Bandwidth
• Power and frequency configurability
► Premium capacity through footprint shaping and stee ring, power and frequency band pairing that customers will be able to actively define
► Targeting for users operating in Government and Mob ility markets
Most of the capacity is devoted to Cairo, during day-time in Africa
Most of the capacity is devoted to NYC,during day-time in Americas
Example of a coverage hopping between 2 markets
Satellite programme capex profile
57
TYPICAL TIMING OF CAPEXPAYMENTS
► Capex generally split equally over three years prior to launch
► Insurance paid in year three
BREAKDOWN OF CAPEX
30% 30% 40%
YEAR 1 YEAR 2 YEAR 3
Launcher
Insurance
Others
Satellite
57
>30%1 in capex savingsImproved IRREnhanced performance
Design-to-cost: EUTELSAT 5 West B case study
58
DESIGN-TO-COST
Improved match of coverage with
customer requirements
Lower cost of payload
Smaller platform
Lower launch cost
Lower insurance cost
LAUNCH
Shared launch in a stacked
configuration on a Proton rocket
(1) relative to the theoretical cost of replicating EUTELSAT 5 West A’s Ku band mission
Satellite economic model 1: Regular capacity
591 For a greenfield satellite, using chemical propulsion
1.6
1.3
3.1
1.5
1.3
1.5
1.2
1.3
2.6
1.4
1.2
1.8
1.5
1.3
3.2
1.5
1.21.5
1.1
1.3
2.7
1.41.3
1.7
1.4
1.2
2.8
1.3
1.0
1.4
1.0
1.2
2.5
1.4
1.2
1.6
North America LATAM Western Europe Central Europe CIS & Central Asia MENA SSA Southern Asia North East Asia Chi na area South-East Asia Oceania
AVERAGE REVENUE PER TRANSPONDER (m$)
Source: Euroconsult 2016 - Average Revenue per 36-Mhz Transponder for regular capacity only
2013
2014
2015
Industry average revenue per transponder 2013-2015
60
LEAP Programme: €30m cost-savings by 2019
611At constant currency
► EBITDA margin above 75%• Scope for improvement relative to
best-in class
► c.€140m of adressable costsidentifed• Out of total opex base of c.€340m
► Target of >20% reduction• Based on granular internal analysis
and benchmarking
► Cost savings target attributed to each manager with attendant incentivisation
LAUNCH OF LEAP WITH IDENTIFIEDSAVINGS TIMING AND IMP ACT OF LEAP
FY 2016-17 FY 2017-18 FY 2018-19
Launchand
quick wins
€15m savings
€30msavings
EBITDA margin 1 target raised*
>76%>76%
*from >75% previously for the three years
>77%
IR Contacts
62
Joanna DARLINGTONT: +33 1 53 98 31 07 E: [email protected]
Cédric PUGNIT: +33 1 53 98 31 54 E: [email protected]