The most important thing we build is trust
DEFENCE SYSTEMS DIVISION • Defence Electronics
MISSION SYSTEMS DIVISION • Aviation Services
• Life Support
• Mission Equipment
AEROSPACE AND SECURITY DIVISION • Aerospace Communications
• Antenna Systems
• Commercial Systems
• SATCOM
• Tactical Communications and Surveillance
SATCOM Site Visit
10th October, 2013
The most important thing we build is trust
DEFENCE SYSTEMS DIVISION • Defence Electronics
MISSION SYSTEMS DIVISION • Aviation Services
• Life Support
• Mission Equipment
AEROSPACE AND SECURITY DIVISION • Aerospace Communications
• Antenna Systems
• Commercial Systems
• SATCOM
• Tactical Communications and Surveillance
Simon Nicholls, CFO
Cobham SATCOM
Agenda
2 10 October 2013
08.30 Welcome
Simon Nicholls, Cobham CFO
08.35 Introduction and Overview of Cobham Aerospace and Security Division
Richard Tyson, President Cobham Aerospace and Security Division
09.05 SATCOM management presentation (part I)
Walther Thygesen, SVP Cobham SATCOM
09.45 Break
10.00 SATCOM management presentation (part II)
Walther Thygesen, SVP Cobham SATCOM
10.45 Q&A on presentation, followed by short break
Cobham plc
Cobham SATCOM
Agenda
3 10 October 2013
11.30 Start of site tour
Visitors split into groups for site tour accompanied by Cobham management
12.30 Site tour concludes & back for lunch
Buffet lunch to be served
13.00 Start of Q&A on facility tour plus final opportunity for other questions
Group, Division and Cobham SATCOM management
13.30 End of Q&A
13.30 Closing Comments
Simon Nicholls, Cobham CFO
13.45 Depart Lyngby
Cobham plc
Cobham plc
Group* Revenue £853m
Cobham Aviation Services
Cobham Aerospace & Security
Cobham Defence Systems
Cobham Mission Systems
Cobham Aerospace & Security over 40% of Cobham revenue
* Excludes non-core business
42%
18%
20%
20%
4 10 October 2013
H1 2013 Revenue - Group
Cobham plc
H1 2013 Revenue
Aerospace & Security Division
Group* Revenue £853m
Cobham Mission Systems
Cobham Aerospace & Security
Cobham Aviation Services
Cobham Defence Systems
Cobham Aerospace & Security Revenue £363m
Cobham Antenna Systems
Cobham Tactical Communications
& Surveillance
Cobham Aerospace Communications
Cobham SATCOM
Cobham SATCOM approx. one quarter of CAS Division
* Excludes non-core business
5 10 October 2013
Cobham plc
Chief Executive Officer
Bob Murphy
Cobham Defence
Systems Division
Jill Kale
Cobham Aerospace and
Security Division
Richard Tyson
Cobham Mission
Systems Division
David Squires
6 10 October 2013
Divisional Leadership Structure
The most important thing we build is trust
DEFENCE SYSTEMS DIVISION • Defence Electronics
MISSION SYSTEMS DIVISION • Aviation Services
• Life Support
• Mission Equipment
AEROSPACE AND SECURITY DIVISION • Aerospace Communications
• Antenna Systems
• Commercial Systems
• SATCOM
• Tactical Communications and Surveillance
Richard Tyson, President – Cobham Aerospace and Security Division Overview
Cobham plc
Cobham Aerospace and Security Division
Organisation
President
Cobham Aerospace and
Security Division
Richard Tyson
Finance
Chris Jewell
Contracts and
Commercial
Stephen Beeching
Human Resources
Bob Brown
Operations
Stewart Partridge
Cobham Aerospace
Communications
Eiji Kawaishi
Cobham Tactical
Communications and
Surveillance
Daniel Gelston
Cobham Antenna
Systems
Fred Cahill
Cobham SATCOM
Walther Thygesen
8 10 October 2013 Cobham Aerospace and Security
Cobham plc
Aerospace and Security Division
Business Overview
A global, diversified communications & electronics technology business with increasing commercial exposure
Revenue by Customer
EADS
US DOD
Lockheed Martin
UK MOD
Thales
L-3
Northrop Gruman
Inmarsat
Raytheon
Other
Revenue % Headcount %
Principal Operating Locations - Marlow, UK - Solent, UK
- Exeter, NH
- Concord, CA
- Prescott, AZ
- Copenhagen, Denmark
- Rungis Troyes, France
CAS Divisional Sales Office Service Centre’s Partners
North America 45% 35%
RoW 12% 9%
UK 11% 23%
Europe 32% 32%
9 10 October 2013 Cobham Aerospace and Security
Cobham plc
US Defence /
Security
35%
Non US
Defence /
Security 25%
Commercial
Aerospace/ GA
22%
Commercial
Maritime/ Other
18%
Aerospace and Security Division
Growing exposure to commercial and international markets
Significant increase in commercial portfolio - 40% in 2011 now >50%
2011 FY Revenue
US Defence /
Security
25%
Non US
Defence /
Security 24%
Commercial
Aerospace/ GA
20%
Commercial
Maritime/
Other 31%
2013 H1 Revenue
10 10 October 2013 Cobham Aerospace and Security
Cobham plc
CAS Division H1 2013 Performance
11 10 October 2013 Cobham Aerospace and Security
HIGHER
LOWER
Building Scale In Top 3
Ma
rke
t G
row
th
Non US Defence / Security
Commercial
US Defence / Security
Market Positions – H1 2013 Actual
Investing in growing commercial markets with good market positions
• Revenue increase driven by acquisitions of Thrane & Thrane in 2012 and Axell Wireless in 2013
• Commercial markets performing well with 8% organic growth, notably in aerospace and SATCOM
• US defence/security lower by 10% with reduced demand in short cycle operations
• Increased investment in Product and Technology funded by EiD benefits
2013 H1 2012 H1
(constant FX)
Change
%
Revenue £m 363.3 311.4 16.7%
PV £m 32.1 23.6 36.0%
Trading Profit £m 67.5 65.7 2.7%
Trading Margin 18.6% 21.1% (2.5)pts
Cobham plc
Europe 19% North America 56%
Commercial* 28%
Non-US Defence & Security 30%
US Defence & Security
42%
Air 60%
Land 36%
Sea 4%
Space <1%
Antenna Systems SBU
Key Capabilities and Main Growth Drivers
Facts
• ~1,850 Employees
• 13 Sites in the UK, USA,
Finland, & Sweden
• Principle Sites:
• Marlow, UK
• Exeter, US
• PV is 8% of revenue
Markets
• Defense and Commercial Helicopter & Fixed-Wing
• General Aviation
• Commercial Air Transport
• Law Enforcement
• OEM and Retrofit
• Distributed Antenna Systems (DAS)
Strong platform positions on long term programmes providing good business visibility
Communication antennas for all frequencies, specialist composite parts, wireless network extensions & sub system microwave components
• Certified sole source position on wide range of military and commercial platforms
• Good international success and growing range of opportunities across Asia
• Improving commercial balance with air transport growth and Axell acquisition
*Commercial revenue is 35% on a pro forma basis
RoW 8% UK 17%
12 10 October 2013 Cobham Aerospace and Security
Cobham plc
• Beijing Metro, China • Moscow Metro • Olympic Park • The Pentagon
• The Shard, UK • Dulles Airport
• Providing market-leading DAS and coverage products for all major frequency bands and technologies
• Market leader in public safety wireless coverage solutions • OnBoard cellular GSM-R DAS coverage solutions
Application Key Infrastructure Projects
Axell Wireless
Integration progressing to plan
• A global developer and
manufacturer of DAS and wireless
coverage solutions
• A clear focus on quality and
technological innovation
• Axell provides our Antennas SBU the
opportunity to grow in to an
adjacent commercial market
Growth underpinned by long term trend of urbanisation & public safety
13 10 October 2013 Cobham Aerospace and Security
Cobham plc
US Defence & Security 6%
Non-US Defence & Security 24%
Markets
• Helicopter & Fixed-Wing
• Civil General Aviation
• Civil Air Transport
• Military Training
• Search & Rescue
• Law Enforcement
• Customs & Boarder Patrol
• OEM and Retrofit
Aerospace Communications SBU
Facts
• ~1,100 Employees
• 9 Sites in France, UK, USA
• Principle Sites:
• Rungis/Troyes, France
• Prescott, US
• PV is 7% of revenue
Key Capabilities and Main Growth Drivers
Commercial 70%
Improving positions on key growth platforms will drive business growth
Airborne electronics, electrical communication and light systems. Radio & audio management and in-cabin wireless communications
• Build rates in air transport are up and will remain resilient with positions secured on new programs e.g. C919
• Increasing shipset content and value to Cobham
− Improving size, weight and power for customers
• Strong existing technology positions with Airbus e.g. RAIMS and Antennas
Air 72%
Space 11% Land 17%
Europe 62%
North America 22%
RoW 9% UK 7%
14 10 October 2013 Cobham Aerospace and Security
Cobham plc
Tactical Communications and Surveillance SBU
•Cobham
•Mission
•Systems
Key Capabilities and Main Growth Drivers
Facts
• ~500 Employees
• 9 Sites reducing to 3
• UK, USA, Denmark, Canada
• Principal Site:
• Solent, UK
• PV is 11% of revenue
Markets
• Counterterrorism and Intelligence
• Law enforcement and public safety
• Military platform comms
• Critical Asset protection
• Broadcast
Good international growth and leveraging technology opportunities, US headwinds
Surveillance communication technologies for tracking, voice and video transmission in harsh environments enabled via very robust and flexible self healing wireless communication networks
• Well positioned and respected by our key customers for reliable equipment where lives are at stake
• Current US budget issues are compounding a short cycle business with limited visibility
• Aggressively rationalising the business base from nine to two sites in the US
• Good strong growth in international markets
• Leveraging technology into new markets e.g. Broadcast, Oil & Gas and Commercial Tracking
Non-US Defence & Security 37%
US Defence & Security 57%
Commercial 6%
Land 100%
North America 63%
RoW 14% UK 16%
Europe 7%
15 10 October 2013 Cobham Aerospace and Security
Cobham plc
95,0%
68,0%
4.499
Standard Operating Framework (SOF) implementation
• Production Systems 5 sites complete, one underway
• Engineering, 6 sites
• Supply Chain, 6 sites
Site Rationalisations
• 17 projects either underway or completed
• 19 sites closed
Building a more integrated, streamlined, competitive business
Focus On Customers Through EiD
Foundation for generating sustainable organic growth
Prescott Audio Value Stream Metrics
ON TIME
DELIVERY
CUSTOMER
DEFECTS
PARTS
PER MILLION
59.0%
98.0% +
Jul-13 Nov-10
FIRST PASS YIELD
25,681
16 10 October 2013 Cobham Aerospace and Security
68.0%
95.0%
4,499
Cobham plc
Commercial Air Transport
• CAS grew Air Transport revenue grew strongly in 2012
• Improved ship set value on the new platforms supplemented by new products and airborne SATCOM connectivity in the next 5-10 years
CAS Divisional Drivers of Future Growth
Emerging markets will be an important source of organic growth
• New resources and co-ordinate sales resources from across the division and new acquisitions will fuel growth in the following territories – China, SE Asia, Korea, Brazil, India
Leveraging technology into adjacent markets
• Broadcast and energy markets (Surveillance)
• Humanitarian relief (SATCOM and antennas)
• In Building Wireless (Antennas)
Cobham Brazil
Cobham Shanghai
Cobham Singapore
New Satellite launches GlobalXpress Ka-band will drive growth for SATCOM Marine and Land products
17 10 October 2013 Cobham Aerospace and Security
Cobham plc
Strategy in Summary
• The Division is making good progress in rebalancing the portfolio, a process that will continue with future organic and M&A opportunities
• Investing strongly in new products and technology to ensure leadership in the key growth areas like SATCOM
• Near term challenges exist in the Defence facing businesses especially in North America
• Dealing with revenue and margin pressure head on
• Aggressive site consolidation programme significantly reducing fixed costs
• Harnessing EiD efficiency improvements to maximise customer performance and competitiveness, while working hard to maintain margins
• Develop collective geographical coverage to access new areas of growth
Organic revenue growth is the number one priority
18 10 October 2013 Cobham Aerospace and Security
The most important thing we build is trust
LAND • Portable BGAN
• Drive-Away and Fly-Away VSAT Systems
• Satcom-on-the-Move for BGAN and VSAT
AERO • SwiftBroadband
• Swift 64
• Systems
• Antennas
MARITIME • VSAT Antenna Systems
• TV Solutions
• FleetBroadband
• GMDSS
• VHF and MF/HF radios
• AIS and Navtex
SYSTEMS • Infrastructure
• BGAN RAN
• Inmarsat-C
• Inmarsat-M/B
• Inmarsat Classic Aero
Walther Thygesen, SVP Cobham SATCOM
The most important thing we build is trust
LAND • Portable BGAN
• Drive-Away and Fly-Away VSAT Systems
• Satcom-on-the-Move for BGAN and VSAT
AERO • SwiftBroadband
• Swift 64
• Systems
• Antennas
MARITIME • VSAT Antenna Systems
• TV Solutions
• FleetBroadband
• GMDSS
• VHF and MF/HF radios
• AIS and Navtex
SYSTEMS • Infrastructure
• BGAN RAN
• Inmarsat-C
• Inmarsat-M/B
• Inmarsat Classic Aero
Introduction to the satcom industry
The Satcom Industry
Cobham SATCOM
Major Satellite Operators
Mobile Satellite Services (MSS) and VSAT services
21 10 October 2013
• MSS: Mobile Satellite Services. Inmarsat and Iridium the only operators offering truly global coverage
• VSAT: Very Small Aperture Terminal. VSAT services are typically regional services – no truly global providers today. The services are offered through satellite operators such as Intelsat, SES and Eutelsat with the majority of revenue originating from TV broadcasting and enterprise VSAT solutions
Inmarsat 459
Iridium 171
Globalstar 35
Thuraya 62
Others 44
MSS service providers
Total revenue 2012: GBP 771 million
Intelsat 1,624
SES 1,544
Eutelsat 1,031
Top-3 operators of VSAT services
Total revenue 2012: GBP 4,199 million
Sources: Company financial reports
Frequency Bands
Ku Ka L C
1-2GHz 12-18GHz 20-40GHz 4-8GHz
MSS VSAT VSAT VSAT
Cobham offers solutions for mobile communications across all frequency bands
Cobham SATCOM
Cobham
Furuno
JRC
AvL Rockwell
Collins
Honeywell
All Others
The Satcom Equipment Market
22 10 October 2013
Maritime
Land
Aero
Systems
100% = GBP ~800 million
Sources: SATCOM estimates
Satcom equipment market
2012
Cobham market share
2012
100% = GBP ~800 million
Cobham is market leader in a sustainable and growing industry
• The satcom equipment market includes MSS and VSAT user equipment for mobile communications such as terminals, modems and antennas
Cobham SATCOM
The Inmarsat I-4 Satellite System
23 10 October 2013
Sources: Inmarsat financial reports
Cobham’s business is to a large degree based on the I-4 system
• The I-4 satellite system was launched in 2005
• It consists of three geostationary satellites
• Provides global voice and data services with speeds of up to 492 kbps
• The satellites operate in the L-Band (1-2 GHz)
• Approx. 378,000 active terminals as of June 2013
- Maritime: 189,000
- Land: 172,000
- Aero: 16,000
I-4 coverage map
Cobham terminal examples
FleetBroadband Vehicular / Portable BGAN SwiftBroadband
Cobham SATCOM
Frequency Bands and Bandwidth
24 10 October 2013
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 0 GHz
Ku Ka L
Expensive Spectrum resources
Frequency robustness Low
C
• L-band Stable, not vulnerable to rain fade. Bandwidth*< 1 Mbps. Antenna dish typically 0.2 – 0.7m
• C-band Stable, not vulnerable to rain fade. Bandwidth*< 2 Mbps. Antenna dish typically 2.4 – 3.5m
• Ku-band Stable, slightly vulnerable to rain fade. Bandwidth*< 20 Mbps. Antenna dish typically 80cm – 1.5m
• Ka-band Less stable, vulnerable to rain fade. Bandwidth*< 50 Mbps. Antenna dish typically 60cm – 1m
Inmarsat’s introduction of a global Ka-band system provides many new opportunities
* Bandwidth is dependent on the specific system configuration
Cobham SATCOM
Inmarsat GlobalXpress
Complements Inmarsat’s I-4 network
25 10 October 2013
Inmarsat has announced
• Investment of USD 1.2B in new GX satellite constellation
• Supported by three Ka-band satellites, GX will offer global coverage and speeds of up to 50Mbps
• Primary targeted segments: Government, Maritime and Air Transport
• First satellite scheduled for launch late 2013 / early 2014
• Full deployment of network to be completed by the end of 2014 / beginning of 2015
• Cobham is a GX launch partner
A global high-speed broadband satellite network
Sources: Inmarsat financial reports
Cobham SATCOM
Natural disasters
Satcom Growth Drivers
Lack of terrestrial communications coverage is the fundamental business driver
Regulatory changes
Business continuity
Security and surveillance
Asset management
IP-data connectivity
Technology cycles
Lower cost of usage
News now
Operational efficiencies
Exploration activities Internet access everywhere
Lack of terrestrial coverage
Command and control
26 10 October 2013
Maritime and aeronautical safety services
The most important thing we build is trust
LAND • Portable BGAN
• Drive-Away and Fly-Away VSAT Systems
• Satcom-on-the-Move for BGAN and VSAT
AERO • SwiftBroadband
• Swift 64
• Systems
• Antennas
MARITIME • VSAT Antenna Systems
• TV Solutions
• FleetBroadband
• GMDSS
• VHF and MF/HF radios
• AIS and Navtex
SYSTEMS • Infrastructure
• BGAN RAN
• Inmarsat-C
• Inmarsat-M/B
• Inmarsat Classic Aero
Cobham SATCOM
Cobham SATCOM
Cobham SATCOM 28 10 October 2013
Cobham SATCOM – the Power of Four
The combined business offers a wider product range and a broader route to market
Cobham SATCOM
TracStar Orlando, US
Omnipless Cape Town, SA
Sea Tel Concord, US
Founded in 1996 Acquired in 2005
Founded in 1978 Acquired in 2003
Founded in 1995 Acquired in 2001
Founded in 1981 Acquired in 2012
Thrane & Thrane Denmark
Cobham SATCOM
SATCOM at a Glance
29 10 October 2013
• Leading manufacturer of equipment for mobile satellite communication and maritime radios
• Product offerings for all satcom markets, i.e. Aeronautical, Land and Maritime
• Capabilities centered around communication and the growing demand for data, connectivity and bandwidth
• Locations in Denmark, Norway, USA, China, South Africa and Singapore
• Approx. 900 employees
• Scalable global go-to-market model for distribution/sales with 250 partners across EMEA, Americas & Asia
• Sales directly to customers accounts for approx. 20% of total sales
• The industry’s largest network of 50 service and support centres
Partners Service centres
Broadest sales and service network in the industry
SATCOM service network
Cobham SATCOM
AERO
SYSTEMS
MARITIME
LAND
SATCOM Markets
Aeronautical, Land, Maritime and Systems
30 10 October 2013
• Our satellite communication products target all markets for Inmarsat’s services
• We also develop, manufacture and sell maritime radio, VSAT and TV communication products
Cobham technologies are leveraged across all market segments
Cobham SATCOM
Comprehensive Product Portfolio
Solutions across frequency bands
31 10 October 2013
MF/HF Ku Ka
30-1000MHz
VHF/UHF
1-30MHz 1-2GHz 12-18GHz 27-40GHz
L C
4-8GHz
Mobile & Safety Radio VSAT & TV VSAT & TV VSAT & TV
Land
Aero
Maritime
Strong position gained from years of successful development for complex environments
Offered by other Cobham SBUs
Cobham SATCOM
• SATCOM’s products are developed for demanding professional customers
• Around 300 specialist engineers engaged with product development activities
• Technology investments are essential in order to
- Introduce new products and enable new opportunities
- Reduce product costs and shorten development lead-times
- Strengthen our technology leadership position
• SATCOM focuses on
- Maintaining a high level of organic product development activities
- Developing common products and modules that can be leveraged across market segments
- Delivering competitive products and optimizing margins through design for manufacturing and outsourcing of production
- Optimising size, weight and power consumption of the products to meet customer demands and strengthen our competitive position
10 October 2013
Competitive position achieved through leveraging technology across markets
Technology Leadership
Common products leveraged in all markets
32
Cobham SATCOM
Customer Service
• Unparalleled service network
• Global customer service handling system covering all products
• Technical training academy across the SBU
10 October 2013
Synergies from Integration
Achievements in R&D, Operations and Sales
33
Product Development
Sales & Marketing
Operations
• Site consolidation and reduced headcounts
• Costs reductions through global procurement
• Standardization of procedures to improve efficiency
• Stronger and broader R&D capability
• Elimination of duplicate efforts - redeployment of resources to fuel new development projects
• Faster introduction of new products
• Streamlining of routes to market with fully integrated partner network
• One order handling centre with regional presence close to partners
• Global contract and channel program management
On track to deliver technology synergies
Cobham SATCOM
SATCOM Revenue Split
34 10 October 2013
Revenue by market
2012
Revenue by segment
2012
Maritime and commercial are largest segments of the business
• All markets expected to show healthy growth in the coming years
US Defence &
Security
6%
Non-US Defence &
Security 14%
Commercial
80%
Aero
14%
Land
18%
Maritime
61%
Systems
7%
Cobham SATCOM
Maritime Maritime The maritime products comprise radios, satellite modems and antennas. The products are used for radio and satellite communication, typically by merchant vessels, oil rigs, workboats, fishing vessels and pleasure crafts.
Cobham SATCOM
• Voice and data solutions (L-band, VSAT, TV) and radio communication for safety and operational communication
• Safety and regulatory requirements
• Bridge communication solutions
- ship-to-ship & ship-to-shore
• Optimization of operations
• Vessel and cargo tracking
• Crew welfare - internet, TV and telephony
• Cruise passenger connection and entertainment services
• Surveillance and rescue operation coordination including anti-piracy
Energy
Gov.
Cruise Merchant
Fishery
Leisure
Segments and Applications
Maritime
36 10 October 2013
Cobham provides communications solutions for all market segments
Market segments
Share of market
Cobham
Furuno JRC
All
Others
100% = GBP ~400 million
100% = GBP ~400 million
Sources: SATCOM estimates
Cobham SATCOM
Growth possibilities in all market segments
Maritime Market Going Forward
Move toward broadband
37 10 October 2013
Sources: Comsys, Clarkson, Lindberg International and Euroconsult
Trends and drivers
• Trend of multiple terminals, MSS and VSAT, on-board vessels
• New technologies drive move towards broadband services
• Strong focus on optimizing operations and fuel consumption in merchant market
• More affordable equipment and services open opportunities in the Fishery market
• Range of emerging applications including real-time weather updates, crew calling, and electronic logging
• Regulatory requirements such as ECDIS and LRIT
• Despite weak new building market still 2,000-2,500 new vessels added each year – approx. 80% of SATCOM revenue is from retrofit
- Merchant: + 70,000 SOLAS (deep-sea) vessels
- Fishery: More than 200,000 vessels
- Leisure: 5,000 super-yachts (>24m), 120,000 private yachts (>12m)
- Cruise: 4,200 passenger ships (>300 GT) including 400 cruise ships
- Energy: Around 800 oil rigs and more than 3,000 supply vessels
Cobham SATCOM
Multiple Drivers Underpin Growth
Demand for operational efficiencies, crew welfare and safety
38 10 October 2013
Generating future organic growth by enabling the increased flow of information
• Ship operators need to monitor/control fleets to reduce fuel costs and enhance compliance with emission legislation
• Fuel is the single largest annual cost for a shipping company running into USD billions
• Operators require access to multiple sources of information - engine performance, weather and chart updates, vessel traffic, port/berth access, perishable cargo condition
• Internet access improves workforce retention and crew welfare
• SATCOM terminals enable operators to access increased bandwidth of Inmarsat GX network
Cobham SATCOM
Reduce total cost of ownership
Adjacent technologies
Continuing Regulatory Requirements
Offerings for SOLAS and radio communications
39 10 October 2013
Adjacent technologies, product integration and focus on total cost of ownership drive growth
AIS Class A Navtex
GPS
Remote access to communication package
Product integration
• New complementary products including AIS, Navtex and GPS
• Add value to the mandatory fit via integration with navigation packages
• Shipboard equipment integration with satcom to reduce cost of ownership
GMDSS LRIT SSAS
Safety and piracy
Mandatory fit on all +300GT vessels, cruise and passenger vessels to comply with IMO
(International Maritime Organization) and SOLAS (Safety of Life At Sea) regulation
Cobham SATCOM
Satcom Development
Demand for more bandwidth and standardized solutions
40 10 October 2013
Demand driven by smaller hardware, need for IP data connectivity and standardised solutions
Continued request for more data drives VSAT growth in all segments
Traditional VSAT
Growth drivers - Effective hardware - Standardised packages
Ku/Ka-band with L-band
- Lighter and smaller antennas
- Standardised solutions
- Higher throughput
Tomorrows VSAT
C- and Ku-band
- C-band very reliable, weather resistant
- C-/Ku-band highly configurable, customised
- Heavy antennas
Inmarsat A Inmarsat B and Fleet
Inmarsat FleetBroadband
Cobham SATCOM 10 October 2013 41
Land The land products primarily target data transmission needs and include portable terminals as well as terminals for vehicular use. Such equipment often has to be used in demanding circumstances.
Cobham SATCOM
Energy
Media
Aid
Transport.
Gov.
• Voice and data systems, L-band (BGAN) and VSAT – portable and vehicular solutions including Coms-On-The-Move (COTM)
• Communication independent of terrestrial infrastructure
• Satellite news gathering
• Tracking and monitoring including M2M (Machine-to-Machine)
• Support of large scale government programmes such as elections and pension payment services
• First line of responders – e.g. after natural disasters
• Voice and data contingency services
• Service integration with cellular networks e.g. Push-To-Talk (PTT)
Segments and Applications
Land
42 10 October 2013
Strong BGAN position – combination of businesses offers VSAT growth opportunities
Market segments 100% = GBP ~230 million
Cobham
All Others
Cobham
AvL
GD Vertex
RC Duluth
Indra ND
Satcom
All Others
Share of market BGAN
100% = GBP ~30 million VSAT
100% = GBP ~200 million
Sources: SATCOM estimates
Cobham SATCOM
Land Market Going Forward
Inmarsat GX and VSAT opportunities
43 10 October 2013
Trends and drivers
• Increasing demand for high throughput portable broadband terminals in Government and Media markets
• Global mobility – communication solutions for rapid response
• Integration of VSAT and BGAN – offers the least cost and highest information assurance
• Launch of Inmarsat GX – opens new services and attractive solutions
• Very fragmented VSAT market – moving from regional to global orientation
• New segments adopting VSAT technology
Cobham well-positioned for growing VSAT market
Cobham SATCOM
Introducing EXPLORER 710
A new ultra-portable BGAN terminal
44 10 October 2013
EXPLORER 710 – the smallest terminal in its class
EXPLORER 710 benefits
• Smaller than EXPLORER 700 (approx. 2/3 of the size) - 15% lighter
• First and only terminal to support Inmarsat’s new HDR (High Data Rate) streaming service; provides a guaranteed bandwidth of 650 Kbps
• Detachable antenna and smartphone apps
• Ultra-portable and lightweight (3.2 kg) with more capability
EXPLORER 700 EXPLORER 710
Cobham SATCOM
EXPLORER 710
The HDR difference
45 10 October 2013
Cobham SATCOM
The EXPLORER 325 Push-to-Talk
Ruggedized solution for mobile work forces
46 10 October 2013
Expand the addressable BGAN market through applications focus
• Provides digital Push-To-Talk capability over satellite and terrestrial networks
• Addresses the growing demand for unlimited voice and data connectivity to mobile work forces
• Target markets - Blue light – Police, Ambulance, Fire Brigades
- Utility – Power, Gas, Water Distribution
- Exploration – Oil & Gas, Mining
- Transportation – Trains, Trucks
• Set up and configuration from handset
• Supports dispatch and closed user group functionality
• Seamless least cost routing between two cellular networks and BGAN (2G/3G/4G)
Cobham SATCOM
Elektro Brazil
Replaced VHF radio network with EXPLORER Push-To-Talk
10 October 2013 47
Cobham SATCOM
Aero The aeronautical products comprise communication equipment for corporate, government and commercial airline aircrafts. The products support cockpit and passenger voice and data applications.
Cobham SATCOM
Cobham
Honeywell Rockwell Collins
All others
Air Transport
Business Aviation
Government
• Voice and data solutions (L-band) to support aircraft, cockpit and cabin communication
• Regulatory requirements and safety services
- Aircraft Traffic Control
- Airline Info Services
• Passenger information and entertainment services
• Support of Unmanned Aerial Vehicles (UAVs)
• Transmission of real-time surveillance data, e.g. ship oil-spill and bushfires
• Coordination of rescue and maritime anti-piracy operations
Segments and Applications
Aero
49 10 October 2013
Demand for connectivity for both cockpit and cabin
Market segments
Share of market
100% = GBP ~170 million
100% = GBP ~170 million
Sources: SATCOM estimates
Cobham SATCOM
Aero Market Going Forward
New products and services drive growth
50 10 October 2013
Trends and drivers
• Increasing number of aircraft and growing demand for IP data connectivity
• Only approx. 3,000 aircraft world wide are equipped with an IP data connection
- Air Transport (Commercial Airlines): ~19,000
- Business Aviation: ~18,000
- Government including helicopters: ~21,000
• Commercial Airline aircraft population predicted to increase to 39,000 over a 20 year period - 34,000 new aircraft will be deployed in the period
• Next generation of products focusing on Inmarsat SwiftBroadband Safety Services
• New services open opportunities in the helicopter market
• The Chinese CAAC has mandated that all Chinese operators must have a solution to communicate with their aircraft within four minutes at any time
Strong competitive advantage with new product portfolio
Sources: Honeywell and Boeing
Cobham SATCOM
Cobham Experience
Satcom antennas for cockpit and cabin communications
51 10 October 2013
Cobham is the preferred choice on a large number of aircraft models
• Developed, certified and manufactured aeronautical antennas for the Inmarsat network since 1997
• Antennas certified on
• Boeing 737 (option)
• Boeing 767 (option)
• Boeing 777 (option)
• Boeing 787 (standard)
• Boeing 747-8 (standard)
• Boeing 747-400 (option)
• Airbus SA (318,319,320,321) (option)
• Airbus LR (330,340) (option)
• A350 (will be standard)
• A380 (standard)
• A400M (option)
• C295 (option)
• Antennas also certified for aircraft models manufactured by Embraer, Bombardier, Dassault, Gulfstream etc.
Cobham SATCOM
Aircraft Communication Segregation
Ideal match with the L-band capabilities of Cobham
52 10 October 2013
Attractive growth opportunities in Air Transport
Cockpit Cabin
Operational (AIS/AOC):
Airline Info Services
Aircraft Control:
(AC/ATC)
IFE & Comms (PIES):
Pax Info & Entertainment
• Aircraft Control / Air Traffic Control
- High reliability and security
- Compliance with standards and mandates
• Operational efficiency via applications with real-time communication
• Cabin connectivity with high bandwidth and low cost
• Airlines need data communication to enhance operation and efficiency including:
- Secure segregated ACARS and IP data covering Air Traffic Control, Aircraft Operation and Passenger Services
Cobham SATCOM
AVIATOR S Series
Technology improvements to meet customer demand
53 10 October 2013
Same functionality in a much smaller package
Typical ARINC 781 ship set
New AVIATOR 200S ship set
• IP Data (1 SBB Channel) • ACARS Data • Segregation between ATC Data and AOC Data • Safe Voice
• 6MCU Box 11.5 kg • Flat Pack DLNA 2.5 kg • High Gain Antenna 10 kg
• Power consumption: 200W
• 2MCU Box • Antenna
• Power consumption: 50W • Drag on Antenna approx. 40 % less than HGA-7001
Total weight < 6 kg Total weight min. 24 kg
Cobham SATCOM 10 October 2013 54
Systems Land earth stations provide the interface between the satellite system and the terrestrial networks for public switched telephone networks, cellular networks and data transmission networks. The land earth stations transmit data to and receive data from the satellites.
Cobham SATCOM
Segments and Applications
Systems
55 10 October 2013
• Infrastructure for satellite networks such as Inmarsat and its service providers
• A market highly dependent on Inmarsat introducing new services
• The most important revenue driver is Inmarsat BGAN – expected to continue for the coming years
PSTN /
INTERNET
Land Earth Station
Approximately 60 gateways to 20 locations around the world.
Satellite
Land earth stations with Cobham SATCOM equipment
Cobham has delivered almost all Inmarsat gateways in service
Cobham SATCOM 10 October 2013
Summary
Cobham SATCOM
SATCOM – Strategy in Summary
57 10 October 2013
• Successfully complete the integration of the SATCOM SBU • Strengthen and further develop our core L-band satellite
communications business and secure high growth of our key initiatives in Ku- and Ka-band
• Ensure technology leadership by maintaining high level of organic product development activities and by leveraging our investments across vertical markets
• Develop the geographical coverage and the skillset of our global sales and services network to match our vertical market strategies
• Expand organically and through M&A into adjacent markets where leadership positions can be developed
• Secure our market leading market position via a broad product portfolio, presence in all segments and a strong sales and distribution network
Cobham strongly positioned for future growth in all markets
Cobham SATCOM
Agenda
58 10 October 2013
08.30 Welcome
Simon Nicholls, Cobham CFO
08.35 Introduction and Overview of Cobham Aerospace and Security Division
Richard Tyson, President Cobham Aerospace and Security Division
09.05 SATCOM management presentation (part I)
Walther Thygesen, SVP Cobham SATCOM
09.45 Break
10.00 SATCOM management presentation (part II)
Walther Thygesen, SVP Cobham SATCOM
10.45 Q&A on presentation, followed by short break
Cobham SATCOM
Agenda
59 10 October 2013
11.30 Start of site tour
Visitors split into groups for site tour accompanied by Cobham management
12.30 Site tour concludes & back for lunch
Buffet lunch to be served
13.00 Start of Q&A on facility tour plus final opportunity for other questions
Group, Division and Cobham SATCOM management
13.30 End of Q&A
13.30 Closing Comments
Simon Nicholls, Cobham CFO
13.45 Depart Lyngby
Cobham SATCOM
Investor Day Site Tour
Program
60 10 October 2013
Group 1 - Led by Jacob M. Christensen
Group 2 - Led by Henrik Nørrelykke
Group 3 – Led by Casper Jensen
1. Antenna technology Anders Pjetursson, Carsten Thomsen &
Vibeke Fink (10 min.)
Location: 2.W.
1. Technology platforms and production – E710 Claus Borum & Richard Lassen (10
min.)
Location: Ground F. / Production
1. Aero Kim Bille Gram, Peter Thrane & Bror
Malm (10 min.)
Location: 1.N.
2. Test tower - VSAT Christian M. Petersen (10 min.)
Location: Test Tower
2. Antenna technology Anders Pjetursson, Carsten Thomsen
and Vibeke Fink (10 min.)
Location: 2.W.
2. Technology platforms and production – E710 Claus Borum & Richard Lassen (10
min.)
Location: Ground F. / Production
3. Aero Kim Bille Gram, Peter Thrane & Bror
Malm (10 min.)
Location: 1.N.
3. Test tower - VSAT Christian M. Petersen (10 min.)
Location: Test Tower
3. Antenna technology Anders Pjetursson, Carsten Thomsen
and Vibeke Fink (10 min.)
Location: 2.W.
4. Technology platforms and production – E710 Claus Borum & Richard Lassen (10 min.)
Location: Ground F. / Production
4. Aero Kim Bille Gram, Peter Thrane & Bror
Malm (10 min.)
Location: 1.N.
4. Test tower - VSAT Christian M. Petersen (10 min.)
Location: Test Tower
Group 1: Walther Thygesen, John Alexandersen (time keeper)
Group 2: Simon Nicholls, Svend Åge Lundgaard (time keeper)
Group 3: Richard Tyson, Julian Wais (time keeper)
Cobham SATCOM
Glossary
61 10 October 2013
ACARS Aircraft Communications Addressing and Reporting System
AIS Automatic Identification System
BGAN Broadband Global Area Network
COTM Communications On The Move
GMDSS Global Maritime Distress Services System
GPS Global Positioning System
GX GlobalXpress
IMO International Maritime Organisation
IP Internet Protocol
LRIT Long Range Identification and Tracking
M2M Machine-To-Machine
MSS Mobile Satellite Services
Navtex Navigational Telex
PSTN Public Switched Telephone Network
PTT Push-To-Talk
Satcom Satellite communication
SBU Strategic Business Unit
SOLAS Safety Of Life At Sea
SSAS Ship Security Alert Systems
VSAT Very Small Aperture Terminal
Cobham SATCOM
Cautionary Statement
62 10 October 2013
For the purposes of the following disclaimers, references to this “document” shall be deemed to include
references to the presenters’ speeches, the question and answer session and any other related verbal or
written communications.
This document contains certain “forward-looking statements” with respect to the financial condition,
results of operations and business of Cobham plc (Cobham) and to certain of Cobham’s plans and
objectives with respect to these items. Forward-looking statements are sometimes but not always
identified by their use of a date in the future or such words as “anticipates”, “aims”, “due”, “could”, “may”,
“should”, “expects”, “believes”, “intends”, “plans”, “targets”, “goal”, or “estimates”. By their very nature,
forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty
because they relate to events and depend on circumstances that may or will occur in the future. There
are various factors that could cause actual results and developments to differ materially from those
expressed or implied by these forward-looking statements. These factors include, but are not limited to,
changes in the economies, political situations and markets in which the Group operates; changes in
government priorities due to programme reviews or revisions to strategic objectives; changes in the
regulatory and competition frameworks in which the Group operates; the impact of legal or other
proceedings against or which affect the Group; changes to or delays in programmes in which the Group is
involved; the completion of any acquisitions and divestitures and changes in commodity prices, inflation
or currency exchange rates. All written or verbal forward-looking statements, made in this document or
made subsequently, which are attributable to Cobham or any other member of the Group or persons
acting on their behalf are expressly qualified in their entirety by the factors referred to above. Cobham
does not intend to update these forward-looking statements.
Cobham SATCOM 63 10 October 2013
The most important thing we build is trust
