Inmarsat plc reports Preliminary Full Year Results 2014

Major steps towards delivering transformational growth opportunities

London, UK: 5 March 2015.  Inmarsat plc (LSE: ISAT.L), the leading provider of global mobile satellite communications services, today provided the following information for the twelve months ended 31 December 2014.

Full Year Financial Headlines

  • Total revenues $1,285.9m (2013: $1,261.9m)
    • Maritime up $70.8m to $595.6m (+13.5%); underlying growth (excl. acquisition) +3.2%
    • Government down $88.4m to $319.9m (-21.7%)
    • Enterprise down $54.9m to $166.7m (-24.8%); underlying growth (excl. disposal) +6.2%
    • Aviation up $27.7m to $101.1m (+37.7%)
    • $75.4m from LightSquared (2013: $12.3m)
  • Wholesale Mobile Satellite Service (MSS) revenues $791.4m, up 3.8% (2013: $762.4m)
  • EBITDA $701.0m (2013: $648.8m)
  • Profit after tax $341.1m (2013: $102.6m)
  • Final dividend increased by 5% to 30.26 cents/share (2013: 28.82 cents/share)

Read the full set of financial results »

Business Highlights

  • Global Xpress (GX) commercial services started on Inmarsat-5 F1 on 1 July 2014; I-5 F2 launched successfully on 1 February 2015
  • European aviation network programme announced; first MSS and ground licences acquired
  • Acquisition of Globe Wireless, disposal of retail energy related assets and 19% stake in SkyWave
  • Issue of $1 billion of 4.875% Senior Notes due 2022
  • Innovative new products and services launched across all Business Units

Fourth Quarter Financial Headlines

  • Total revenues $333.0m (2013: $314.8m)
    • $18.5m from LightSquared (Q4 2013: $2.4m)
  • Wholesale Mobile Satellite Service (MSS) revenues $211.8m, up 9.0% (2013: $194.4m)
  • EBITDA1 $165.3m (2013: $150.9m)

Rupert Pearce, Inmarsat’s Chief Executive Officer, commented,

“2014 was a year of solid delivery for Inmarsat and also a year in which we took major steps towards delivering the compelling growth opportunities that will transform our business.

Continuing underlying L-band growth in Maritime, Enterprise and Aviation during the year was offset by continued weakness in our Government business in the US, although this decline slowed towards the end of the year. Helped by a strong Aviation performance, our wholesale MSS revenue growth accelerated in the fourth quarter. Including $75.4m of revenue from LightSquared, our total revenues for the year grew by 1.9%.

We started offering commercial GX services from our first I-5 satellite in July, and the response from customers has been very favourable – the experience GX delivers is better than expected. Our second satellite was launched successfully on 1 February, and with the third currently on schedule to follow in the second quarter, we remain on track to launch commercial GX service globally early in the second half of this year.

Global demand for high-speed mobile data communications continues to surge ahead. GX will transform the experience for broadband users at sea, in the air and in remote locations, connecting them to the data-rich services and applications that are now a core part of everyday work and life.

In 2014 we added a third technology, S-band, into our growth road-map, with the decision to invest up to $450m in a hybrid satellite and ground-based network in Europe. From late 2016 this will complement our global GX service by delivering a cost-effective and technically efficient solution for airlines to meet the demand for connectivity from their passengers flying over Europe.

We expect 2015 to be another year of building for the medium-term, with continuing steady growth in L-band in all our businesses except Government, particularly in the US, and benefitting from some early stage GX revenues. We will focus hard on delivering the remainder of our GX investment programme, and on building momentum in Aviation, with major progress in our S-band programme.”

Outlook and Guidance

The trading environment in 2015 is expected to be broadly similar to 2014, with continuing underlying revenue growth in Maritime, Enterprise and Aviation and some continued weakness in Government, particularly in the US.

Our longer-term revenue expectations remain unchanged. We continue to expect wholesale MSS revenue to fall within the 8-12% CAGR growth range for 2014-16, and we expect annual GX revenues of $500m by the fifth anniversary of the global launch of commercial GX services.

Capex in 2015 is expected to be in the range $450-500m, as guided previously. We expect capex in 2016 and 2017 to be below $400m.

Results Presentation

Inmarsat management will host a presentation of the Results on Thursday 5 March at the company’s offices at 99 City Road, London EC1Y 1AX, starting at 09.00 hrs London time.

To register to attend the presentation please contact Celeste Houghton at Inmarsat on +44 207 728 1206 or e-mail celeste.houghton@inmarsat.com.

A live web-cast of the presentation will be available through our web-site and via a simultaneous conference call : +44 (0) 20 3427 1916; for US : + 1718 354 1158. Code 7103798.

Contacts

Investor Enquiries:
David Boyd
Tel: +44 (0)20 7728 1518
david.boyd@inmarsat.com
Media Enquiries:
Chris McLaughlin/Jonathan Sinnatt
Tel: +44 (0)20 7728 1935
christopher.mclaughlin@inmarsat.com
jonathan.sinnatt@inmarsat.com

[1] EBITDA is defined as profit before finance income and expenses, taxation, depreciation and amortisation, losses on disposal of assets, impairment losses and share of profit of associates.