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Inmarsat plc reports Preliminary Full Year Results 2018
Consistent Revenue and EBITDA growth

7 March 2019

Inmarsat plc announces unaudited financial results for the year ended 31 December 2018.

Summary and Financial Highlights
In 2018, Inmarsat delivered good growth in Revenue and EBITDA, with year-on-year increases of 5.3% and 4.2% respectively and consistent quarter-on-quarter improvement. This result, building on the return to growth established in 2017, was driven by the strength of our global GX broadband offering, particularly in Aviation, Government and Maritime, and by lower indirect costs. Aviation revenues grew by over 40%, within which In-Flight Connectivity revenues more than doubled.

Operational Highlights4  2018 Group Revenue (ex Ligado) increased by $71.6m, or 5.7%, to $1,334.5m, including $26.6m increase in Q4: o Maritime: consistent double-digit growth in revenues and further market share capture in the fastgrowing VSAT segment. New strategies are being implemented in the mid-market, to help protect market share, as customers migrate to VSAT o Government: sustained and growing penetration of the US customer base. Revenues little changed in other markets o Aviation: In-Flight Connectivity (“IFC”) revenues more than doubled to $101.3m, including first GX IFC airtime revenues and with materially improved cash flow. Improved IFC market position with growing order book and strategic Panasonic agreement. Core business continues to deliver high margin double-digit revenue growth o Enterprise: legacy markets remain in long term decline, with foundations to access the emerging global satellite “Industrial Internet-of-Things” (“IIoT”) opportunity building steadily o GX airtime and related revenues4: grew by around 85% to $250.9m (2017: $135.9m)
 2018 Group EBITDA (ex Ligado) increased by $27.0m, or 4.4%, to $639.5m, including $23.3m increase in Q4, reflecting growth in revenue and absence of further restructuring charges  2018 Group Profit After Tax: down $60.0m (32.4%) to $125.0m, with higher EBITDA more than offset by higher depreciation  Further development of technology roadmap: GX-5 and I-6 satellite programs on track, new lower cost, higher functionality network architecture in development to drive meaningful moderation in capex from 2021  These operational highlights exclude the impact of Ligado, which is not part of our core operations. Ligado contributed revenues of $130.7m (2017: $128.8m) and EBITDA of $130.6m (2017: $126.8m).

1 2017 figures have been restated throughout this announcement to reflect the adoption of IFRS15 and the accounting policy change for unallocated launch slots. The Group has also adopted IFRS16 and IFRS9 as of 1 January 2018. Please refer to Appendix 2 of this document for further details. 2 Comprises revenue contribution from Central Services and Ligado Networks. 3 In response to the Guidelines on Alternative Performance Measures (‘APM’s) issued by the European Securities and Markets Authority, we have provided additional information on the APMs used by the Group, including definitions and reconciliations to statutory measures, within Appendix 1 of this document. 4 GX revenues restated for IFRS15 (impacting 2017 figures only) and to include Fleet Xpress terminal revenues, which were not previously included.


Rupert Pearce, Chief Executive Officer, commented on the results:

“Inmarsat delivered consistent growth in 2018, building on our return to growth established in 2017. I am particularly pleased by the 85% revenue growth in GX services and a doubling of our IFC revenues, both of which augur well for the future.

“We remain focused on building and defending substantial market share in our target markets, supported by our diversified product portfolio and leading-edge networks. This will ensure we are able to fully capitalise on both the immediate and longer-term growth opportunities in these markets.

“Supported by a tightly controlled cost base and an infrastructure capital investment programme which we are confident will meaningfully and sustainably moderate from 2021, we expect to generate sustained free cash flow growth over the medium to long term.”

Future Guidance

The Board remains confident about the future prospects and outlook for the Group, and provides the following guidance:  A target of mid-single digit percentage revenue growth on average over the five year period, 2018 to 2022, with EBITDA and free cash flow generation improving steadily1 (unchanged)  2019 revenue, ex Ligado, of $1,300m to $1,400m (new)  Annual GX revenues at a run rate of $500m by the end of 2020 (unchanged)  Cash Capex of $500m to $600m per annum for 2019 and 2020 (unchanged)  Capex is expected to meaningfully moderate thereafter 2020, falling initially to within a range of $450m to $550m in 2021 (updated)  Net Debt: EBITDA to normally remain below 3.5x (unchanged)

The Group manages a diverse growth portfolio of businesses and products that in aggregate are expected to deliver the guidance above, with the portfolio mix expected to continue to evolve as individual markets develop over the medium term.

The diversity of our business, with a focussed and attractive set of core end markets that offer scale and growth potential, and where we lead with sustainable differentiation, will remain a key strength for Inmarsat going forward.