5/23/2013 1 NewSat overview NewSat is Australias largest pure -play - - PowerPoint PPT Presentation

NewSat Limited

ASX Spotlight Conference 2013

5/23/2013

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NewSat is Australia’s largest pure-play satellite communications company

• NewSat provides remote and temporary sites

with fast, secure and reliable internet, voice, data and video communications via satellite

• NewSat has grown from a “solutions provider”

into a “teleport operator”, and through the Jabiru Satellite Program, NewSat will become a global “satellite operator”

• NewSat has the rights to 8 premium orbital

slots and its first satellite, Jabiru-1, will launch in 2015

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NewSat overview

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Experienced management team

Michael Hewins Chief Operating Officer

>30 years of executive management experience in global space industry Satellite Experience: AON / International Space Brokers (Chief Commercial Officer), Arianespace

Adrian Ballintine Founder and CEO

>30 years of global technology experience Satellite Experience: 2011 Teleport Executive of the Year and Director of the World Teleport Association

David Ball Chief Technology Officer

>20 years of experience in satellite and communication sectors Satellite Experience: Intelsat (Managing Director Asia Pacific), PanAmSat

William Abbott Corporate Counsel >30 years corporate law experience including capital raising, commercial financing, corporate governance, compliance and enforcement Mike Kenneally VP – Satellite Strategy >30 years global ICT and satellite experience with Telecom NZ, Optus, Telstra, Lockheed Martin Len McGoldrick VP – Engineering & Operations 25 years experience in satellite

• perations with

SES New Skies, British Telecom Andrew Matlock SVP – Global Sales >25 years experience in the telco and technology sectors, including at Calcomp Inc. (division of Lockheed Martin) Adam Shapiro Chief Financial Officer / Company Secretary >10 years financial sector experience at PriceWaterhouseCoopers and Ernst & Young in assurance and advisory Merv Kuek SVP – Marketing & Communications >10 years marketing and communications experience, including Telstra and Crazy John’s (subsidiary of Vodafone Australia)

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Current teleport business

NewSat own and operate two Australian teleports that provide coverage to 75% of the globe

Adelaide teleport (South Australia)

• 11 antennas ranging from 2.4 to 13 metres in size
• Up-linking to 8 geostationary satellites across C- and Ku-band
• Interconnected to terrestrial fibre networks and internet backbone
• Secure Global Access Point supporting certified classified networks

to ensure the transmission of vital and sensitive information for government and enterprise clients

• 24 x 7 x 365 on-site Network Operations Centre

Perth teleport (Western Australia)

• 12 antennas ranging from 2.4 to 13 metres in size
• Up-linking to 9 geostationary satellites across C- and Ku-band
• Interconnected to terrestrial fibre networks and internet backbone
• 24 x 7 x 365 on-site Network Operations Centre

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As at 31 Dec 2012 Proforma 31 Dec 2012 (post raise) Assets: $112.7M $234M* Liabilities: $44.7M $59M* Equity: $70.0M $175M* No of shares on Issue: 233,052,157 515,708,507 Market Capitalisation: $121M $220M

*This information is based on the unaudited Statement of Financial Position (Pro Forma Balance Sheet) contained in the NewSat Ltd prospectus dated 25 February 2013. It shows the effect of the Equity Funding *The Pro Forma Balance Sheet is intended to be illustrative only and will not reflect the actual position and balances as at the date of the Prospectus or at the completion of the Equity Funding.

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Balance sheet structure

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Orbital slots – A key asset

• 180 geostationary orbital slots in the world
• NewSat has acquired 8 premium orbital slots in

perpetuity

• These are expected to increase in value over

time

• You cannot launch a satellite without an orbital

slot

• Able to launch multiple satellites in each slot

• 8.3GHz capacity: one of the largest commercial

communication satellites

• 7.6GHz Ka-band
• 648MHz Ku-band
• Ka-band is proven technology
• Ka-band satellites have been operating for

>10 years. Number of Ka-band satellites has steadily increased in the last 5 years

• Highly flexible payload: spot, regional

and steerable beams

• Currently under construction by Lockheed Martin
• Launch date scheduled for mid 2015

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Jabiru-1 is a highly flexible satellite

Jabiru-1 Overview Ka-Band Capacity Overview

Ku-band Ka-band: spot beams Ka-band: regional beams Ka-band: steerable beams (MHz)

Capacity Breakdown

24 Spot Beams

Concentrates power in a specific location

Allow same frequency transmissions in other locations

Potential to switch 5 spot beams into high demand regions to provide additional capacity 3 Regional Beams

Coverage tailored to serve coastlines or specific areas without including unwanted regions

Wider coverage than traditional Ka-band spot beams 2 Steerable Beams

• Ability to position coverage in areas of high

demand anywhere on the visible earth 65% 19% 8% 8%

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Exposure to high growth markets

Satellite offers effective, low-cost carriage in NewSat's target markets, which have minimal fixed network infrastructure, and low 3G mobile and internet penetration

• 1. Includes Armenia, Azerbaijan, Cyprus, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Saudi Arabia, Syria, United Arab Emirates and Yemen
• 2. Includes Burundi, Central African Republic, Chad, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Kenya, Libya, Rwanda, Somalia, Sudan, Tanzania and

• 3. Includes Afghanistan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan and Uzbekistan
• 4. CIA World Factbook, as at 4 February 2013

Worldwide Total Population: 7.0 billion (4)

Internet Penetration 30% 3G Mobile Penetration 16%

Middle East (1) Total Population: 227 million (4)

Internet Penetration 24% 3G Mobile Penetration 11%

North-East Africa (2) Total Population: 376 million (4)

Internet Penetration 14% 3G Mobile Penetration 4%

South-West Asia (3) Total Population: 267 million (4)

Internet Penetration 15% 3G Mobile Penetration

0.3% 5/23/2013

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Growth in emerging markets and Ka-band

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Historical Transponder Usage by Region (1) Global Capacity Demand by Frequency Band

Source Euroconsult

• 1. Excludes multispot beam Ka-band demand, which has been relatively small historically
• 2. 36MHz transponder equivalents

Ka-band is supplementary

 Widely used  Broad footprint  Least rain fade  Reliable low bandwidth  Interference from terrestrial systems  Larger earth station antenna required  New spectrum unavailable

C-Band

(4-8GHz)

 Higher power transmission  More focused beams  Some rain fade / signal attenuation issues  Spectrum saturated

Ku-Band

(12-18GHz)

 Offers high capacity bandwidth at already occupied satellite positions  Greatest user flexibility  Smaller end-user antenna  Higher frequency  New spectrum available  Some rain fade / signal attenuation issues at the surface

Ka-Band

(26-40GHz)

Uses Uses Uses

 Full-time TV distribution  Contribution feeds  Backhaul and VSAT  Direct-to-home (DTH) television  Satellite news gathering  Fixed and broadcast services  Backhaul and VSAT  Enterprise communication networks  Military applications  Aeronautical & mobility applications  Fixed and broadcast services  Backhaul and VSAT  Enterprise communication networks  Military applications  High throughput satellite (HTS) applications  Aeronautical & mobility applications

Ka-band capacity can operate adjacent to C- and Ku-band frequencies with no interference

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Competitors

NewSat – Good Neighbour, Supplementary Offering, Selling Flexible Raw Capacity

Ka-Band Capacity Outline in Jabiru-1 Footprint

Company Service Offering Footprint Ka-band Ku-band NewSat Competitive Assessment

INTELSAT Leased capacity  Middle East / North Africa (limited coverage)

 

 Single Ka-band transponder being added to some satellites to protect spectrum filings. Recently announced Intelsat EpicNG project which is believed to include some multispot beams in C-, Ku- and Ka-band SES Steerable beam  Europe and West Africa

 

 Limited Ka-band added to protect filings  May 2012 CEO stated policy to “gently increase” Ka-band capacity SES / O3B Leased trunking capacity  Coverage of visible earth to +/- 45° latitude



 Trunking vertical market competitor, particularly in Africa  MEO(1) system, complicated antennas required at each site  Expensive and complex ground segment EUTELSAT Leased capacity  Middle East / North Africa and Central Asia

 

 Ka-Sat consumer broadband bundled with TV (not Jabiru target)  Major geographic focus on Europe INMARSAT Global Express offers voice & data service  Global Express offering - total cover of Jabiru catchment, but capacity is spread evenly over many spot beams



 Primarily addressing a different market (maritime) but competitive in some vertical markets  Global coverage beams offer limited throughput ARABSAT Leased services  Ku coverage Arabian Peninsula. Steerable Kaband

 

 Primarily consumer broadband focused  Steerable may compete for limited enterprise clients but not military AMOS 2012 launch  Coverage over Middle East and Central Asia

 

 Potential future competitor – consumer focus but also potential enterprise market player in Middle East / North Africa and Africa AVANTI DTH & leased capacity  West & Central Europe, small Middle East

• verlap



 Initial consumer market focus (not Jabiru target) DTH & leased capacity  Europe, South Africa, Kenya, UAE, Afghanistan



 Some comparable coverage. Spot beams over Iraq and Afghanistan (single, isolated beams only) YAHSAT Consumer services & some leased capacity  Arabian Peninsula and Middle East

 

 City focused, less powerful shaped beam than Jabiru  Steerable may compete for limited enterprise clients but not military  Main thrust is managed services not wholesale capacity ABS Leased capacity  Middle East

 

 Limited capability  Wide area regional beam low power compared to Jabiru AsiaSat Leased capacity  Limited coverage

 

 Single Ka-band transponder added to future satellite to protect spectrum filings Turksat Leased capacity  Middle East and Central Asia

 

 Limited capability – geographic focus on Caspian Sea region

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Jabiru-1 launch vehicle

Footage courtesy of Arianespace. Ariane 5 launcher carrying a Lockheed Martin A2100 spacecraft

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Jabiru-1 satellite

Footage courtesy of Lockheed Martin. Lockheed Martin Commercial Space Systems A2100 spacecraft being manufactured

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Experienced partners

• 1. ECA funding subject to customary conditions precedent,.
• 2. Weighted average interest rate based on Ex-Im Bank benchmark Commercial Interest Reference Rate (CIRR) of 1.81%, effective from 15 February 2012. Final interest

Export Credit Agency (ECA) Debt Financing Providers (see Appendix for summary term sheet)

• ~US$400MM facility size for Jabiru-1
• Approved by Ex-Im Bank Board (1)
• COFACE promesse granted
• Weighted average fixed interest rate of ~3.0% (2)
• 8.5 year amortisation period from commencement of operations

Finance partners

• Construction contract signed; preliminary design review (PDR) completed
• Jabiru-1 construction commenced and is on schedule
• Using proven A2100 series spacecraft platform
• Currently 39 A2100 series spacecraft in orbit
• Design life 15 years
• Over 100 GEO (geosynchronous earth orbit) commercial communications satellites launched
• Launch Service Agreement signed
• Accounts for over half of all worldwide commercial launches
• Using proven Ariane 5 rocket technology
• 53 consecutive successful launches
• 300 primary satellites launched from French Guiana operations

Construction and launch partners

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Sources and uses

Sources of Funds

(US$MM) (1)

Uses of Funds

(US$MM) (1)

Ex-Im Bank Direct Loan 291 Spacecraft & Launch Vehicle 384 COFACE Guaranteed Facility 108 Insurance 36 Mezzanine 30 Opex / Non-Satellite Capex 50 Standby Facility 25 Interest During Construction 19 New Equity Issued 105 ECA Exposure Fees 39 Equity Spent to Date 49 Other(2) 41 DSRA 14 Contingency 25 Total Sources ~608 Total Uses ~608

CONFIDENTIAL

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Customers & pipeline

1 U.S. satellite operator, looking for Ka-band expansion 88 Negotiations well progressed 2 Southeast Asian satellite operator



74 Contract under review, negotiations well progressed 3 Pakistani telco, trunking / backhaul service 72 Reviewing proposal 4 Systems integrator providing Government welfare communications



11 Current Jabiru customer, considering extension 5 Australian based, non-Government communications provider 10 Contract under review, negotiations well progressed 6 Systems integrator providing general Government services



8 Reviewing proposal 7 Division of large satellite operator, Maritime / Government applications



7 Reviewing proposal 8 Systems integrator focused on UAV services 5 Reviewing opportunity 9 - 27 Additional J-1 pipeline customers (including 1 existing teleport customer)



179 Various Subtotal Jabiru-1 454 J-2 & J-3 Additional pipeline customers for J-2 and J-3 175 Various Grand Total 629

Weighted Toward Telco and Govt.

Telco Government Enterprise (Total Contracts + Sales Pipeline = US$1,247MM)

Estimated Sales Pipeline Across Jabiru-1, 2 & 3 – US$629MM Binding Pre-Launch Contracts – US$618MM

(US$MM)

197 105 134 40 67 32 13 30

618 175 350 525 700

~18% of Jabiru-1 life of satellite capacity currently pre-sold

Pre-Launch Contracts Sales Pipeline Total Contracts + Pipeline

Direct-to-Home (DTH) 16% 26% 36% 22%

+

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High Bandwidth data applications expected to drive growth

Enterprise Data Networking Government and Military Operations 3G / 4G Mobile Backhaul

• Reliance on time-sensitive data/connectivity
• Growth in remote oil, gas and mining operations
• Current customers of teleport business – we understand their service requirement
• Provides connectivity across multiple sites / operating locations
• Backup for enterprise networks
• Accredited to provide services to certain Governments / military
• Increased utilisation of data-rich technologies (e.g. UAV’s)
• Increasing Government reliance on private sector
• Ongoing conflicts in Middle East / North Africa region
• Small % of operating costs / defence budgets
• Connectivity across multiple sites (e.g. mobile, airborne, maritime)
• Critical to data service delivery
• Expected growth in mobile data volume / smartphones in emerging economies.

Customers seek large bandwidth volumes

• Limited existing network infrastructure capable of satisfying demands
• Reliable connection into fixed/fibre networks. Cost effective
• Ubiquitous rural and remote access

Rationale / Opportunity Existing customers / End Users

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Capacity: Jabiru-1 capacity 8.3GHz

• Expected Year-1 Fill Rate: >60%

− Industry average 74% (’06 – ’10A) − Pre-sales at a ~30% discount to market − Long-term take-or-pay contracts − No pre-sales of high value steerable beams (~8% of capacity) – − reserved to sell on the spot market – expected higher pricing Revenue: Jabiru-1 total annual capacity (US$MM p.a.) Operating Costs: Fixed, marginal costs expected to be in-line with standard FSS operating model. Variable costs include insurance (including in-orbit insurance) and sales commissions Depreciation: Straight-line over 15 years (deferred until launch) Teleport & Jabiru-2: Ability to transfer existing supply arrangements to “owned” capacity on Jabiru-2 will expand margins

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Established FSS economic model providing significant potential returns

Key Economics of Jabiru-1 Industry Fill Rate (1) and EBITDA Margin (2) Capacity Pricing Over Middle East (3)

(%)

1.00 1.25 1.50 1.75 2.00 2.25 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Ka-band C-band Ku-band

(US$MM / TPE)

65% 70% 75% 80% 2006 2007 2008 2009 2010 % Fill Rate % EBITDA Margin Capacity Utilisation (%) 80% 70% 60% 1.2

220 193 165

1.3

239 209 179

1.4

257 225 193

Weighted Average Price p.a. (US$MM / TPE)

• n NSR GASSD 2009 research covering the Middle East region

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Additional projects – NewSat’s

• pportunity is scalable

Jabiru-2 Jabiru-3 Jabiru-4

Asset Type

Hosted payload (aboard MEASAT-3b) Owned satellite Owned satellite

Target Markets

Oil, gas & mining corporates, government markets Resources, military, government and carrier-grade telecom markets Resources, military, government and carrier-grade telecom markets

Orbital Slot

91.5°E 89.5°E / 54.0°E 54.0°E / 89.5°E

Capacity

216 MHz (6 TPE) 3 – 4 GHz (83 – 111 TPE) 3 – 4 GHz (83 – 111 TPE)

Bands

Ku-band Ka-band Ka-band

Coverage

Australia, Timor-Leste and Papua New Guinea Africa, the Middle East, Europe, Asia and Indian Ocean Africa, the Middle East, Europe, Asia and Indian Ocean

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NewSat investment highlights

Exposure to High Growth Markets Early Mover in Ka-Band Supports Value Enhancing Applications Focus Leveraging Existing Teleport Business Expertise to Execute on Established FSS1 Economic Model Balance Sheet Anchored by Attractive Export Credit Financing from High Quality Lenders Highly Experienced Management Team 46% of the first 3 years of Satellite Capacity Sold, with a Promising Pipeline of Blue-Chip Customers

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Thank you

Melbourne, Australia Gold Coast, Australia Bangkok, Thailand Perth, Australia Washington DC, USA Dubai, UAE Adelaide, Australia Texas, USA Karachi, Pakistan Sydney, Australia Singapore, Singapore Johannesburg, South Africa

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