Morgan Stanley Australian Emerging Companies Conference Presentation
London, June 15, 2017 AEST (ABN Newswire) - SpeedCast International Ltd (
ASX:SDA) is pleased to provide the Company's latest Presentation at Morgan Stanley Australian Emerging Companies Conference.
The global leader in remote communications and IT services
- Speedcast is the world's most trusted provider of fully managed remote communication network and IT services
o Industry leader: extensive worldwide footprint of local support, infrastructure and coverage coupled with world-class technology and a strong safety culture
o Innovator: able to design, integrate, secure and optimize networks tailored to customer needs
o Customer focused: with technology agnostic solutions and support designed to meet the needs of each unique customer installation
o Highly Skilled People make the difference in the services Speedcast provides
o Creating value for our customers beyond connectivity to meet evolving customer needs
Focus on earnings growth and shareholder returns
- Growth - where will it come from?
o Organic revenue growth from increasing demand for connectivity and positive underlying fundamentals in industries served by Speedcast
o Revenue synergies from acquisitions (new markets/services)
- Margins expansion from operating leverage & scale
o EBITDA margins have grown from 11% in 2011 to 19% in 2016
o Increasing scale has improved group's negotiating power with suppliers
o Operating leverage as critical mass now reached leading to economies of scale; opex expected to grow at a slower rate than revenues in future years
o Satellite industry entering period of oversupply; Speedcast to leverage its competitive position to optimise benefits for shareholders and customers
- Returns
o EPS growth from margin % expansion, strong cash flows and revenue growth
o Strong cash flow generation (FCF > EPS);
o Low capex requirements; ~$5M of maintenance capex p.a.
o Capex < Depreciation & amortisation
o Ability to de-leverage balance sheet quickly
o Opportunities for further accretive M&A transactions in fragmented market
2016 - tough year but delivered growth
- 2016 was tough year for industry, many competitors saw declines in their financial results, both revenue and EBITDA
- Speedcast outperformed vs peers, growing the business and completing a transformational acquisition
- Dual growth strategy delivered double digit earnings growth (in both EBITDA and NPATA per share)
- SDA has delivered organic service revenue growth since IPO, 10% in 2015 and 2% in 2016, as well as additional EBITDA growth from scale benefits & synergies
- Growing faster than the market
o Increasing market share in strategic markets (Energy & Maritime)
o Room for more growth....only 10-15% of overall market revenues
Value creation - Integration, Harris Caprock acquisition
- Integration of Harris Caprock continues to progress well
- 15 x work-streams initially established covering all areas
- 2 x work-streams completed in full (HR / Organisation)
- A further 5 are expected to be completed at the end of June
- Approximately 85% of milestones expected to be achieved by 30 June
- External project management and support will be minimal from 30 June onwards; internal integration team will continue to drive remaining integration activities, which we anticipate to be mostly completed by end of the year
- On track to deliver acquisition case bottom line synergy savings of $15M in 2017 and $24M in 2018. Identifying opportunities to exceed target synergies.
Operations - competitive advantages
- Extensive expertise in all major disciplines (long tenure of most key employees in all market segments and all technologies)
- Local presence - significant people, assets, and facilities close to customer field operations
- Global reach - All encompassing coverage for all aspects of customer service and delivery across continents
- Expertise to support systems integration, remote IT and other value added services
- Platform to rollout large scale products on a global basis
- Scale and strategic relationships with all major vendors
o Antennas, routers, bandwidth (8500Mhz), etc.
- Network of owned tele ports - control over quality/reliability of service and additional flexibility
- Sizeable global MPLS network
- People - ability to attract and retain talent given market leadership position
Speedcast is well positioned for future growth
- Dual strategy delivered strong growth in 2016 across all key financial metrics
- Strong underlying financial characteristics to drive earnings growth and increased shareholder returns
- Increasing demand for connectivity will underpin long-term growth, supported by technology developments and satellite capacity availability
- Leadership positions in key growth markets - Energy sector expected to recover; Cruise to lead maritime growth
- Competitive advantages to gain market share - Scale; Unique capabilities and experience; Strong culture; Reputation and track record; Great customer base
- Innovation to lead to new revenue opportunities - Expertise to expand our offering into nonconnectivity services
- Acquisition of Harris Caprock has positioned Speedcast as the global leader in remote communications and IT services with unique scale and capabilities, at a time when some of our key competitors are facing significant challenges
To view the full presentation, please visit:
http://abnnewswire.net/lnk/M8UR9I5H
About Speedcast International Ltd
Speedcast International Ltd (ASX:SDA) is the world's most trusted communications and IT services provider, delivering critical communications solutions to the Maritime, Energy, Mining, Media, Telecom, Cruise, NGO, Government, and Enterprise sectors. With more satellite capacity than any other provider, Speedcast enables faster, seamless pole-to-pole coverage from a global hybrid satellite, fiber, cellular, microwave, MPLS, and IP transport network with direct access to public cloud platforms. The company also integrates differentiated technology offerings that provide smarter ways to communicate and distribute content, manage network and remote operations, protect and secure investments, and improve the crew and guest experience. With a passionate customer focus and a strong safety culture, Speedcast serves more than 3,200 customers in over 140 countries. Learn more at www.speedcast.com.
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