Inmarsat plc Reports Preliminary Full Year Results 2013

London, UK: 6 March 2014. Inmarsat plc (ISAT.L), the leading provider of global mobile satellite communications services, today reported consolidated preliminary financial results for the year ended 31 December 2013.

Inmarsat plc – Highlights

  • Adjusted[1] total revenues $1,249.6m (2012: $1,277.6m)
  • Total Inmarsat Global MSS revenue $762.4m up 3.3% (2012: 738.0m)
  • Adjusted[2] EBITDA $639.8m (2012: $642.8m)
  • Profit before tax $189.1m (2012: $293.6m)
  • Adjusted[3] profit before tax $365.3m up 8.6% (2012: $336.4m)
  • Final dividend of 28.82 cents (US$) up 5%
  • Continued subscriber growth: FleetBroadband, XpressLink, SwiftBroadband
  • New CFO announced

Inmarsat Group Limited – Fourth Quarter Highlights

  • Inmarsat Global MSS revenues $194.3m up 5.4% (2012: $184.4m)
  • Inmarsat Solutions revenues $192.6m (2012: $208.2m)
  • Total EBITDA $150.9m (2012: $150.5m)

Rupert Pearce, Inmarsat’s Chief Executive Officer, said, “We finished the year strongly with both financial and operational achievements.  We saw continued momentum in our wholesale MSS business, with growth of over 5% in the fourth quarter.  As a result, we outperformed our 2012-2013 revenue target, delivering a two-year CAGR in our wholesale MSS revenues of 2.9%.  We also controlled costs successfully to ensure a strong performance in EBITDA.

“In December, we had a successful launch and deployment of our first Inmarsat-5 satellite, which we now expect to enter commercial service in mid-2014.  Alphasat, launched in July 2013, is now in commercial service and has strengthened our L-band network it terms of capacity, capability and resilience.

“Our 2013 achievements mean we enter 2014 with confidence.  We have a market-leading MSS business, with growth in key services.  In addition, we have new MSS services beginning to make a meaningful contribution and exciting new product launches ahead.  In our Global Xpress programme, we remain on track to complete global coverage with two further satellite launches planned before the end of the year and we believe that market appetite remains consistent with our three-year wholesale MSS revenue growth target of between 8% and 12% CAGR for the period 2014-2016.”

Inmarsat plc
(US$ in millions) 2013 2012 Increase/
Inmarsat Global – MSS revenue 762.4 738.0 3.3%
Inmarsat Global – Other income (including LightSquared) 44.6 97.9 (54.4%)
Inmarsat Solutions 765.5 810.3 (5.5%)
1,572.5 1,646.2 (4.5%)
Intercompany eliminations and adjustments (310.6) (308.4)
Total revenue 1,261.9 1,337.8 (5.7%)


Inmarsat Global[a]
(US$ in millions) 2013 2012 Increase/
  Maritime voice services 72.4 79.7 (9.2%)
  Maritime data services 358.7 331.5 8.2%
Total maritime sector 431.1 411.2 4.8%
  Land mobile voice services 21.6 14.3 51.0%
  Land mobile data services 109.6 118.1 (7.2%)
Total land mobile sector 131.2 132.4 (0.9%)
  Aviation sector 114.1 100.8 13.2%
  Leasing 86.0 93.6 (8.1%)
Total MSS revenue 762.4 738.0 3.3%
  Other income (including LightSquared) 44.6 97.9 (54.4%)
Total revenue 807.0 835.9 (3.5%)



Growth in our maritime data revenues was driven by increased take-up and usage of our FleetBroadband service and by certain pricing and service package changes primarily implemented in May 2012 and March 2013.  During the year we added over 7,200 FleetBroadband subscribers of which approximately 1,400 were added during the fourth quarter.  Our total installed base for FleetBroadband exceeded 41,000 active terminals at the end of the year. We are continuing to see strong take-up of FleetBroadband subscription-based usage plans, driving ARPU growth and increasing maritime revenue visibility.  We believe that FleetBroadband’s service capabilities combined with attractive usage plans have materially improved our competitive position in the maritime market.

Land mobile

In the land mobile sector, we saw strong growth in voice services, driven by IsatPhone Pro, offset by a decline in data revenues primarily due to ongoing troop withdrawals from Afghanistan, but also from lower BGAN usage levels more generally. We estimate that global events including Afghanistan contributed $6.7m more revenue in 2012 when compared to 2013.  At the end of the year our remaining annual run-rate revenue from Afghanistan was less than $8m.  During the year we saw growth in our base of BGAN subscribers and saw encouraging early stage growth in both revenues and terminals from our M2M services.

Aviation and Leasing

The increase in aviation revenue was driven by strong growth from our SwiftBroadband service, offset by a decline in Swift 64 revenues due to lower usage by certain government customers, including usage related to reduced activity in Afghanistan.  Growth in SwiftBroadband revenues was driven by take-up in business aviation and for commercial in-flight passenger connectivity services.  The decrease in leasing revenue was due to a reduction in revenue from certain government aviation and maritime contracts.

Inmarsat Solutions
(US$ in millions) 2013 2012 Decrease
  Inmarsat MSS 380.4 400.5 (5.0%)
  Broadband and Other MSS 385.1 409.8 (6.0%)
Total revenue 765.5 810.3 (5.5%)

The decrease in Inmarsat MSS revenue at the Inmarsat Solutions level was driven primarily by a combination of lower leasing revenue and by lower BGAN revenue arising from Afghanistan year-over-year.  As Inmarsat Solutions has a disproportionately higher share of both our leasing and BGAN business, the lower revenues from these business lines gave rise to an overall decrease in Inmarsat MSS revenues reported by Inmarsat Solutions, even though MSS revenues grew at the wholesale level. In addition, there was a reduction in Swift 64 revenues from certain government customers.

The decline in Broadband and Other MSS revenue was primarily due to a reduction in revenue from the managed network services segment of our US Government business unit. This decrease was primarily due to contract renewals at lower rates and non-renewals following the implementation of US Government defence spending reductions and a related increase in competition, which are market conditions we expect to continue in 2014.  The decline was partially offset by growth in VSAT revenues as a result of further take-up of our XpressLink service. At the end of the year we had an installed base of 1,478 ships using our VSAT service, including 792 ships using XpressLink.


As our 2013 results show, our Inmarsat Global business has established growth in key L-band services across our market sectors and we believe our competitive position in our core MSS markets is strong.  As a result, we expect growth in our L-band MSS services to continue in 2014.  With respect to Global Xpress (“GX”), following the successful launch of the first Inmarsat-5 satellite in December 2013, we expect commercial service introduction on a regional basis in the middle of 2014.  We therefore expect to begin recognising GX revenues in the second half of the year.

We remain confident that the level of our existing customer commitments for GX services, coupled with strong interest from potential customers and distributors, continue to support our expectations for the commercial success of GX.  We are on track to launch two further Inmarsat-5 satellites during 2014, thereby completing global coverage by the end of the year.  On this basis we reiterate our three-year revenue growth target of 8% to 12% CAGR for Inmarsat Global wholesale revenues for the 2014-2016 period. However, as 2014 comprises a transitional year in which the GX network is first rolled out and commercialised, we do not expect total Inmarsat Global revenue growth reported for 2014 to be within this target range.

In 2014, like-for-like results for Inmarsat Solutions will be adversely impacted by the full-year effect of lower US Government revenues reported in 2013, but partially offset by growth in other areas, predominately by sales of XpressLink in our Commercial Maritime business unit.  Two other factors influencing results will be the sale of certain of our energy VSAT assets to RigNet and the acquisition of Globe Wireless.  Within our Inmarsat Solutions segment we expect the net contribution of these transactions to be a positive impact on EBITDA within the year.

We expect capital expenditure on a cash basis for 2014 to be between $500m and $525m.  This range includes expenditure related to the fourth Inmarsat-5 satellite and fully reflects changes we expect as a result of the recent RigNet and Globe Wireless transactions.  As a result of these factors, we expect leverage (as measured by our ratio of net debt to EBITDA) to peak at the end of the year at between 3.3 to 3.5 times.


At 31 December 2013, the Inmarsat plc group had net borrowings of $1,842m, made up of cash and cash equivalents of $144m and total borrowings of $1,986m.  Including cash and available but undrawn borrowing facilities, the group had total available liquidity of $1,051m.  We remain fully-funded as to all our capital needs for the foreseeable future.

Intercompany Reporting Changes

We have made changes to the internal structure of our business that, while having no impact on the total consolidated results, will have an impact on how EBITDA is reported between our Inmarsat Global and Inmarsat Solutions segments, reducing EBITDA reported by Inmarsat Global with a corresponding increase within Inmarsat Solutions.

In December 2013, Inmarsat Global sold certain operational assets to Inmarsat Solutions.  These assets will continue to be used by Inmarsat Global and therefore, from January 2014, Inmarsat Global will recognise the cost of using these assets in other net operating costs, by means of an intercompany charge, with Inmarsat Solutions recognising a corresponding revenue amount. Previously, as Inmarsat Global owned these assets, the associated cost was recognised as depreciation expense.

On a pro forma basis, had this change been implemented on 1 January 2013, we estimate that the impact on the 2013 results would have been to move approximately $15m of EBITDA from Inmarsat Global to Inmarsat Solutions.  As the nature of these assets and operations is consistent from year to year, we estimate that the impact on 2014 will be similar to the pro forma impact on 2013 stated here.

Our Financial Reports

While Inmarsat plc is the ultimate parent company of our group, our subsidiary Inmarsat Group Limited is required by the terms of our Senior Notes to report consolidated financial results.  We expect that a copy of the full year 2013 results for Inmarsat Group Limited will be posted to our website on or before 30 April 2014.

To assist analysts and investors in their understanding of the results announced today, the following unaudited tables for Inmarsat Group Limited for the fourth quarter are provided below.

Inmarsat Global
Three months ended 31 December
(US$ in millions) 2013 2012 Increase/
  Maritime voice services 18.2 18.7 (2.7%)
  Maritime data services 90.0 86.6 3.9%
Total maritime sector 108.2 105.3 2.8%
  Land mobile voice services 6.5 5.1 27.5%
  Land mobile data services 28.6 26.8 6.7%
Total land mobile sector 35.1 31.9 10.0%
  Aviation sector 30.8 27.1 13.7%
  Leasing 20.2 20.1 0.5%
Total MSS revenue 194.3 184.4 5.4%
  Other income (including LightSquared) 10.5 11.9 (11.8%)
Total revenue 204.8 196.3 4.3%


Inmarsat Solutions
Three months ended 31 December
(US$ in millions) 2013 2012 Decrease
  Inmarsat MSS 93.2 97.9 (4.8%)
  Broadband and Other MSS 99.4 110.3 (9.9%)
Total revenue 192.6 208.2 (7.5%)


Other Information

Inmarsat management will host a presentation of the Results on Thursday 6 March at Inmarsat, 99 City Road, London EC1Y 1AX.  The presentation will begin at 09.00 hrs London time (05.00 hrs EST). A live webcast of the presentation will also be available through our website –  There is no requirement to register to join the webcast.  To register to attend the results presentation in person, please contact Muna Ashra at Inmarsat on +44 (0)20 7728 1206, or  Registration at the event itself will begin at 08.30 hrs on Thursday 6 March.

Forward-looking Statements

Certain statements in this announcement constitute “forward-looking statements”.  These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those projected in the forward-looking statements. These factors include: general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance or programmes, or the delivery of products or services under them; structural change in the satellite industry; relationships with customers; competition; and ability to attract personnel.  You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement.  We undertake no obligation to update or revise any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances.

Contact: Inmarsat plc, London, UK

Investor Enquiries:
Simon Ailes
Tel: +44 (0)20 7728 1518
Media Enquiries:
Chris McLaughlin
Tel: +44 (0)77 9627 6033

[1] “Adjusted”, as applied to total revenue, excludes $12.3m (2012: $60.2m) of revenue from our Cooperation Agreement with LightSquared.
[2] “Adjusted”, as applied to EBITDA, excludes $9.0m (2012: $51.9m) of EBITDA contribution from our Cooperation Agreement with LightSquared.
[3] “Adjusted”, as applied to profit before tax, excludes impairment losses of $185.2m (2012: $94.7m) and $9.0m (2012: $51.9m) of profit before tax contribution from our Cooperation Agreement with LightSquared.
[a]Subscription revenues from allowance plans which can be used to access both voice and data services are recorded entirely within the primary revenue category for that service, being data revenues for BGAN and FleetBroadband and voice revenues for IsatPhone Pro.

Read the full report: Preliminary Consolidated Financial Results for the year ended 31 December 2013