Gilat Satellite Networks
Corporate Presentation
Gilat Satellite Networks | Erez Antebi, CEO
March 2015
1
Driving the Satellite Industry for Over 25 Years
• Leading provider of satellite-based communication products and services
• Designer and manufacturer of ground segment and networking communication equipment,
including…
–
VSAT systems (Very Small Aperture Terminals = modems)
–
Small mobility terminals
• #1 or #2 worldwide VSAT market share
outside of North America
–
#1 (or #2) Satcom provider in all satellite segments
• Shipped over 1.2M terminals to date
• Growth Strategy
–
Broadband driven by High Throughput Satellites
(HTS) with low cost bandwidth
–
Satellite On-The-Move (SOTM);
Commercial and Defense
• 2015 Management Objectives Update:
–
Revenue: between $250 and $260 million
–
EBITDA: between $26 and $28million
2
Global Presence, Local Support
930 Employees Worldwide
R&D Center
NOC
Sales office
5 R&D Centers
3 NOCs (Network Operation Centers)
21 Sales Offices
90 Countries
500 + active networks
Revenue By Geographies 2013
3
Among Our Diverse Customer Base and Partners
Satellite Companies
Telcos / MNOs
Satcom Operators and ISPs
System integrators
Governments
4
Four Main Satellite Market Trends
HTS CAPACITY IS GROWING
PRICE TRENDS BY REGION
Source: Comsys 2014
© Euroconsult 2013
• HTS
–
Abundance of capacity
–
Price erosion
• Broadband (BB) Demand
–
BB Penetration rates are increasing
TOTAL HTS CAPACITY DEMAND BY VERTICAL MARKET
• Cellular Coverage and Networks
–
Coverage is increasing
–
Moving from 2G to 3G/LTE
• Satellite on-the-Move
Source: EuroConsult 2013
–
Mobility needs are growing
5
NSR. Commercial Mobility via Satellite, 10th Edition 2014
Gilat Business Units
Commercial Division
Mobility Division
Services Division
6
Commercial Division
• Markets & Applications:
Broadband Internet, Cellular Backhaul, Enterprise connectivity
• Customers: MNOs, Telcos, Satellite Operators
• Driving Growth:
Ubiquitous broadband demand, lower-cost bandwidth (HTS), cellular
coverage needs
7
Partnering with HTS Providers
• Agreements in place with SES, Thaicom, Inmarsat and O3B
– Value Proposition:
•
Multiple applications on same platform (Broadband, Enterprise, Cellular Backhaul, Mobility,..)
•
Strategic position as technology partner
•
Open System: Multiple ISPs can configure own business offering
– Flexible business models: Risk sharing OPEX model
– Ground equipment, VSATs, HUBs, Gateways and Network Operations
– Collaborative sales and distribution
• Actively pursuing creative partnerships with other leading satellite providers
JCP
8
HTS and Wide-beam
Gilat SkyEdge II-c Supports All Applications
Libra
Low-cost
Consumer
Gemini-i
Consumer
Gemini
Enterprise
Capricorn
3G/LTE Cellular
Backhaul
Capricorn Pro
IP Trunking &
Mobility
Total NMS - Network Management
9
Ka Band Leaders - Gilat and SES
• SBBS Project
• Our SkyEdge II-c hubs and consumer equipment
support SES’s Ka-band service
• 20Mbps service @ 30 euros/month
• Tens of thousands of Consumer Premise Equipment
already delivered (and more on the way)
"Gilat's advanced VSAT
technology allows us to optimize
our service proposition and
increase our competitive
advantage.”
Patrick Biewer
Managing Director
of SES Broadband
Service
10
CellEdge: Small Cell Coverage for Unserved Areas
• Fully integrated 2G/3G solution: VSAT and
energy solution optimized for low-cost,
rapid deployment
• Value proposition to MNOs:
“Tell us where you want coverage and
within a few months you will have it.”
• Example: TIM Brasil
–
Turnkey solution for 20 remote sites in under
2 months, including site survey and acquisition,
equipment delivery, installation and activation of
the network
–
Repeat order for additional 30 sites
• RuralCom Canada
–
Sites running along the Canada – Alaska
highway
11
Super-fast LTE Backhaul Made Possible With Capricorn
• SkyEdge II-c Capricorn: 200Mbps – the world’s fastest TDMA VSAT
• Enable MNOs to connect to LTE network via satellite
• Value proposition to MNOs:
“Rapid deployment of LTE in suburbs to capture market share”
• Initial orders received for Tier-1 Asian operator
12
Mobility Division
• Markets & Applications:
Broadband-on-the-Move, Aviation, Defense, Broadband-on-the-Pause
• Customers:
System Integrators, Airborne Service Providers, Defense Integrators
• Driving Growth:
Broadband demand, Lower-cost bandwidth (HTS), Airborne connectivity
13
Airborne Connectivity - Today
Ka-Band AeroStream™
Transceiver
“The combination of field
experience and innovative
technology was a critical factor
in our selection of Wavestream’s
Ka-band transceivers for
integration into our Global
Xpress antenna system.”
Chris Webster
Honeywell Aerospace
14
Airborne Connectivity - Tomorrow
Full Terminal
15
Tiny Terminals for UAVs
BlackRay Integrated System
16
Rugged Antennas On-the-Move
RaySat ER5000
17
Passenger Broadband Connectivity
RaySat ER7000
18
Manpack On-The-Pause
SatTrooper
19
Services Division - Gilat Peru and Gilat Colombia
• Markets & Applications:
Developing countries, Broadband and communications coverage
• Customers: Government USO entities
• Driving Growth: Bridging the digital divide
20
Services Division: Gilat Peru
• Awarded $285 Million BOT Regional Telecommunications Infrastructure
project by Fitel in Peru. 3 bids won for 3 regions
–
Fiber-optic Transport Network - Build and operate for 1 year
–
Wireless Access Network - Build and operate for 10 years
–
Bringing high quality connectivity to rural villages in need of broadband services.
Connecting more than 600 government institutions
–
Additional revenues expected from selling capacity on new network to Telco’s and
MNO’s
• IAL project operational
• Providing telephony and internet services to 9,000 villages
• Government expected to issue more projects like this over next 2 years
21
Services Division: Gilat Colombia
• $99m project from Colombia’s MINTIC:
–
Deployment finished and operational
–
3 years’ service (2 quarters of service in 2014)
• Internet and educational services to 1,900 rural
communities and schools
22
Financial Indicators
23
Annual Financial Indicators ($M)
Annual Revenues
EBITDA
23.4
Operating Income (loss)
GAAP
Non GAAP
13.1
16.3
234.9
2013
235.1
2014
2013
2014
2013
(4.1)
5.0
4.4
2014
2013
2014
Quarterly Financial Indicators ($M)
Quarterly Revenues
EBITDA
Operating Income (loss)
Non GAAP
7.5
73.1
55.7
50.9
54.1
10.4
57.1
3.6
6.4
3.9
2.5
1.5
2.8
0.5
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q4-13
(0.1)
Q1-14
Q2-14
Q3-14
Q4-14
Profit and Loss Highlights - Non GAAP*
US$ millions, except
per share data
Three months ended
December 31,
2014
2013
Year ended
December 31,
2014
2013
Revenues
73.1
55.7
235.1
234.9
Gross Profit
27.0
21.5
88.7
84.6
Gross Margin
37.0%
38.5%
37.7%
36.0%
R&D net
6.0
7.4
24.7
27.4
S&M
6.9
8.2
31.1
30.9
G&A
6.6
6.0
19.7
21.9
Operating Income
(loss)
7.5
(0.1)
13.1
4.4
Net income (loss)
4.4
(1.0)
7.4
(1.1)
Diluted EPS
0.10
(0.02)
0.17
(0.03)
EBITDA
10.4
2.5
23.4
16.3
* Adjustments reflect the effect of non-cash stock options expenses as per ASC 718, amortization of intangible assets related to share
acquisition transactions and net income (loss) from discontinued operations.
Balance Sheet Highlights – Quarter to Quarter
US$ millions
Cash Balances *
Total Assets
Total Debt
Shareholders’ equity
December 31,
2014
September 30,
2014
53.5
46.7
364.9
352.1
30.9
31.1
225.1
222.6
* Including cash and cash equivalents, restricted cash and net of short term bank credits.
2015 Management Objectives
• Revenues between $250M to $260M
• EBITDA between $26M to $28M
• H2 expected to be significantly stronger than H1
28
Summary
• Satellite communication needs will significantly increase in the near future
–
HTS
–
Mobility
–
Cellular
• Significant opportunities in Government funded rural telecom infrastructure
projects
• Gilat is well-positioned to take advantage of these markets
• Financial situation
–
Significant improvement in profitability
–
Healthy balance sheet
• Continued growth expected
29
Thank You
Gilat Satellite Networks | info@gilat.com | www.gilat.com