10 th October, 2013 The most important thing we build is trust AEROSPACE AND SECURITY DIVISION Aerospace Communications Antenna Systems Commercial Systems SATCOM Tactical Communications and Surveillance DEFENCE SYSTEMS DIVISION Defence Electronics MISSION SYSTEMS DIVISION Aviation Services Life Support Mission Equipment SATCOM Site Visit
The most important thing we build is trust AEROSPACE AND SECURITY DIVISION Aerospace Communications Antenna Systems Commercial Systems SATCOM Tactical Communications and Surveillance DEFENCE SYSTEMS DIVISION Defence Electronics MISSION SYSTEMS DIVISION Aviation Services Life Support Mission Equipment Simon Nicholls, CFO
Agenda 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 09.45 Break 10.00 SATCOM management presentation (part II) Walther Thygesen, SVP 10.45 Q&A on presentation, followed by short break 2 10 October 2013 Cobham plc
Agenda 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 management 13.30 End of Q&A 13.30 Closing Comments Simon Nicholls, Cobham CFO 13.45 Depart Lyngby 3 10 October 2013 Cobham plc
H1 2013 Revenue - Group Group* Revenue 853m Cobham Aviation Services 20% Cobham Aerospace & Security 42% Cobham Mission Systems 20% * Excludes non-core business Cobham Defence Systems 18% Cobham Aerospace & Security over 40% of Cobham revenue 4 10 October 2013 Cobham plc
H1 2013 Revenue Aerospace & Security Division Cobham Aviation Services Group* Revenue 853m Cobham Aerospace & Security Cobham Aerospace & Security Revenue 363m Cobham SATCOM Cobham Antenna Systems Cobham Mission Systems Cobham Defence Systems Cobham Aerospace Communications Cobham Tactical Communications & Surveillance * Excludes non-core business approx. one quarter of CAS Division 5 10 October 2013 Cobham plc
Divisional Leadership Structure Chief Executive Officer Bob Murphy Cobham Aerospace and Security Division Richard Tyson Cobham Defence Systems Division Jill Kale Cobham Mission Systems Division David Squires 6 10 October 2013 Cobham plc
The most important thing we build is trust AEROSPACE AND SECURITY DIVISION Aerospace Communications Antenna Systems Commercial Systems SATCOM Tactical Communications and Surveillance DEFENCE SYSTEMS DIVISION Defence Electronics MISSION SYSTEMS DIVISION Aviation Services Life Support Mission Equipment Richard Tyson, President Cobham Aerospace and Security Division Overview
Cobham Aerospace and Security Division Organisation President Cobham Aerospace and Security Division Richard Tyson Finance Operations Contracts and Commercial Human Resources Chris Jewell Stewart Partridge Stephen Beeching Bob Brown Cobham Tactical Communications and Surveillance Daniel Gelston Cobham Aerospace Communications Eiji Kawaishi Cobham Antenna Systems Fred Cahill Walther Thygesen 8 10 October 2013 Cobham Aerospace Cobham and plc Security
Aerospace and Security Division Business Overview Revenue by Customer Revenue % Headcount % UK 11% 23% North America 45% 35% Europe 32% 32% RoW 12% 9% EADS US DOD Lockheed Martin UK MOD Thales L-3 Northrop Gruman Inmarsat Raytheon CAS Divisional Sales Office Service Centre s Partners Other Principal Operating Locations - Marlow, UK - Solent, UK - Exeter, NH - Concord, CA - Prescott, AZ - Copenhagen, Denmark - Rungis Troyes, France A global, diversified communications & electronics technology business with increasing commercial exposure 9 10 October 2013 Cobham Aerospace andplc Security Cobham
Aerospace and Security Division Growing exposure to commercial and international markets 2011 FY Revenue 2013 H1 Revenue Commercial Maritime/ Other 18% US Defence / Security 35% Commercial Maritime/ Other 31% US Defence / Security 25% Commercial Aerospace/ GA 22% Non US Defence / Security 25% Commercial Aerospace/ GA 20% Non US Defence / Security 24% Significant increase in commercial portfolio - 40% in 2011 now >50% 10 10 October 2013 Cobham Aerospace Cobham and plc Security
Market Growth CAS Division H1 2013 Performance Market Positions H1 2013 Actual 2013 H1 2012 H1 (constant FX) Change % Revenue m 363.3 311.4 16.7% HIGHER Commercial Non US Defence / Security PV m 32.1 23.6 36.0% US Defence / Security Trading Profit m 67.5 65.7 2.7% Trading Margin 18.6% 21.1% (2.5)pts Revenue increase driven by acquisitions of Thrane & Thrane in 2012 and Axell Wireless in 2013 LOWER Building Scale In Top 3 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 Investing in growing commercial markets with good market positions 11 10 October 2013 Cobham Aerospace Cobham and plc Security
Antenna Systems SBU Facts Markets RoW 8% UK 17% ~1,850 Employees 13 Sites in the UK, USA, Finland, & Sweden Principle Sites: Marlow, UK Exeter, US PV is 8% of revenue Defense and Commercial Helicopter & Fixed-Wing General Aviation Commercial Air Transport Law Enforcement OEM and Retrofit Distributed Antenna Systems (DAS) North America 56% Space <1% Europe 19% Land 36% Key Capabilities and Main Growth Drivers 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 Air 60% Commercial * 28% Non-US Defence & Security 30% Sea 4% US Defence & Security 42% Strong platform positions on long term programmes providing good business visibility 12 10 October 2013 Cobham Aerospace Cobham and plc Security
Axell Wireless Integration progressing to plan Application 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 Key Infrastructure Projects Beijing Metro, China Moscow Metro Olympic Park The Pentagon The Shard, UK Dulles Airport 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 Cobham and plc Security
Aerospace Communications SBU Facts Markets RoW 9% UK 7% ~1,100 Employees 9 Sites in France, UK, USA Principle Sites: Rungis/Troyes, France Prescott, US PV is 7% of revenue Helicopter & Fixed-Wing Civil General Aviation Civil Air Transport Military Training Search & Rescue Law Enforcement Customs & Boarder Patrol OEM and Retrofit North America 22% Space 11% Europe 62% Land 17% Key Capabilities and Main Growth Drivers Airborne electronics, electrical communication and light systems. Radio & audio management and in-cabin wireless communications Air 72% 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 Commercial 70% US Defence & Security 6% Non-US Defence & Security 24% Improving positions on key growth platforms will drive business growth 14 10 October 2013 Cobham Aerospace Cobham and plc Security
Tactical Communications and Surveillance SBU 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 RoW 14% North America 63% UK 16% Europe 7% Key Capabilities and Main Growth Drivers Land 100% 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 Cobham at stake Current US budget issues are Mission compounding a short cycle business with limited visibility Systems 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 Commercial 6% Non-US Defence & Security 37% US Defence & Security 57% Good international growth and leveraging technology opportunities, US headwinds 15 10 October 2013 Cobham Aerospace Cobham and plc Security
Focus On Customers Through EiD Foundation for generating sustainable organic growth 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 ON TIME DELIVERY CUSTOMER DEFECTS PARTS PER MILLION Prescott Audio Value Stream Metrics 59.0% 25,681 68.0% 68,0% 98.0% + 4,499 4.499 95,0% 95.0% FIRST PASS YIELD Nov-10 Jul-13 Building a more integrated, streamlined, competitive business 16 10 October 2013 Cobham Aerospace Cobham and plc Security
CAS Divisional Drivers of Future Growth 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 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 Cobham Brazil Cobham Shanghai Cobham Singapore New Satellite launches GlobalXpress Ka-band will drive growth for SATCOM Marine and Land products Leveraging technology into adjacent markets Broadcast and energy markets (Surveillance) Humanitarian relief (SATCOM and antennas) In Building Wireless (Antennas) 17 10 October 2013 Cobham Aerospace Cobham and plc Security
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 Cobham and plc Security
The most important thing we build is trust MARITIME VSAT Antenna Systems TV Solutions FleetBroadband GMDSS VHF and MF/HF radios AIS and Navtex LAND Portable BGAN Drive-Away and Fly- Away VSAT Systems Satcom-on-the-Move for BGAN and VSAT AERO SwiftBroadband Swift 64 Systems Antennas SYSTEMS Infrastructure BGAN RAN Inmarsat-C Inmarsat-M/B Inmarsat Classic Aero Walther Thygesen, SVP
The most important thing we build is trust MARITIME VSAT Antenna Systems TV Solutions FleetBroadband GMDSS VHF and MF/HF radios AIS and Navtex LAND Portable BGAN Drive-Away and Fly- Away VSAT Systems Satcom-on-the-Move for BGAN and VSAT AERO SwiftBroadband Swift 64 Systems Antennas SYSTEMS Infrastructure BGAN RAN Inmarsat-C Inmarsat-M/B Inmarsat Classic Aero Introduction to the satcom industry The Satcom Industry
Major Satellite Operators Mobile Satellite Services (MSS) and VSAT services MSS VSAT VSAT VSAT MSS service providers Total revenue 2012: GBP 771 million Thuraya 62 Others 44 Globalstar 35 Iridium 171 Inmarsat 459 L C 1-2GHz 4-8GHz 12-18GHz 20-40GHz Frequency Bands MSS: Mobile Satellite Services. Inmarsat and Iridium the only operators offering truly global coverage Ku Ka Top-3 operators of VSAT services Total revenue 2012: GBP 4,199 million Eutelsat 1,031 Intelsat 1,624 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 Cobham offers solutions for mobile communications across all frequency bands SES 1,544 Sources: Company financial reports 21 10 October 2013
The Satcom Equipment Market Satcom equipment market 2012 100% = GBP ~800 million Cobham market share 2012 100% = GBP ~800 million Maritime Land All Others Cobham Furuno Aero JRC Systems Honeywell Rockwell Collins AvL The satcom equipment market includes MSS and VSAT user equipment for mobile communications such as terminals, modems and antennas Sources: SATCOM estimates Cobham is market leader in a sustainable and growing industry 22 10 October 2013
The Inmarsat I-4 Satellite System The I-4 satellite system was launched in 2005 I-4 coverage map 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 Cobham terminal examples Sources: Inmarsat financial reports FleetBroadband Vehicular / Portable BGAN SwiftBroadband Cobham s business is to a large degree based on the I-4 system 23 10 October 2013
Frequency Bands and Bandwidth L C Ku Ka 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 GHz Expensive Spectrum resources Frequency robustness Low 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 * Bandwidth is dependent on the specific system configuration Inmarsat s introduction of a global Ka-band system provides many new opportunities 24 10 October 2013
Inmarsat GlobalXpress Complements Inmarsat s I-4 network 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 Sources: Inmarsat financial reports A global high-speed broadband satellite network 25 10 October 2013
Satcom Growth Drivers Lack of terrestrial coverage Maritime and aeronautical safety services IP-data connectivity News now Operational efficiencies Regulatory changes Technology cycles Security and surveillance Natural disasters Business continuity Internet access everywhere Exploration activities Lower cost of usage Asset management Command and control Lack of terrestrial communications coverage is the fundamental business driver 26 10 October 2013
The most important thing we build is trust MARITIME VSAT Antenna Systems TV Solutions FleetBroadband GMDSS VHF and MF/HF radios AIS and Navtex LAND Portable BGAN Drive-Away and Fly- Away VSAT Systems Satcom-on-the-Move for BGAN and VSAT AERO SwiftBroadband Swift 64 Systems Antennas SYSTEMS Infrastructure BGAN RAN Inmarsat-C Inmarsat-M/B Inmarsat Classic Aero
the Power of Four Thrane & Thrane Denmark TracStar Orlando, US Founded in 1981 Acquired in 2012 Sea Tel Concord, US Founded in 1996 Acquired in 2005 Founded in 1978 Acquired in 2003 Omnipless Cape Town, SA Founded in 1995 Acquired in 2001 Cobham SATCOM The combined business offers a wider product range and a broader route to market 28 10 October 2013
SATCOM at a Glance Leading manufacturer of equipment for mobile satellite communication and maritime radios Product offerings for all satcom markets, i.e. Aeronautical, Land and Maritime SATCOM service network 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 29 10 October 2013
SATCOM Markets Aeronautical, Land, Maritime and Systems Our satellite communication products target all markets for Inmarsat s services We also develop, manufacture and sell maritime radio, VSAT and TV communication products AERO LAND MARITIME SYSTEMS Cobham technologies are leveraged across all market segments 30 10 October 2013
Comprehensive Product Portfolio Solutions across frequency bands Radio Mobile & Safety VSAT & TV VSAT & TV VSAT & TV Maritime Land Aero MF/HF VHF/UHF L C Ku Ka Offered by other Cobham SBUs 1-30MHz 30-1000MHz 1-2GHz 4-8GHz 12-18GHz 27-40GHz Strong position gained from years of successful development for complex environments 31 10 October 2013
Technology Leadership Common products leveraged in all markets 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 Competitive position achieved through leveraging technology across markets 32 10 October 2013
Synergies from Integration Achievements in R&D, Operations and Sales Stronger and broader R&D capability Elimination of duplicate efforts - redeployment of resources to fuel new development projects Product Development Sales & Marketing Streamlining of routes to market with fully integrated partner network One order handling centre with regional presence close to partners Faster introduction of new products Global contract and channel program management Site consolidation and reduced headcounts Costs reductions through global procurement Operations Customer Service Unparalleled service network Global customer service handling system covering all products Standardization of procedures to improve efficiency Technical training academy across the SBU On track to deliver technology synergies 33 10 October 2013
SATCOM Revenue Split Revenue by market 2012 Revenue by segment 2012 Systems 7% Aero 14% US Defence & Security 6% Non-US Defence & Security 14% Land 18% Maritime 61% Commercial 80% All markets expected to show healthy growth in the coming years Maritime and commercial are largest segments of the business 34 10 October 2013
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.
Segments and Applications Maritime Voice and data solutions (L-band, VSAT, TV) and radio communication for safety and operational communication Market segments 100% = GBP ~400 million Safety and regulatory requirements Bridge communication solutions - ship-to-ship & ship-to-shore Optimization of operations Fishery Leisure Merchant Energy Cruise Gov. Vessel and cargo tracking Share of market 100% = GBP ~400 million Crew welfare - internet, TV and telephony Cruise passenger connection and entertainment services All Others Cobham Surveillance and rescue operation coordination including anti-piracy JRC Furuno Sources: SATCOM estimates Cobham provides communications solutions for all market segments 36 10 October 2013
Maritime Market Going Forward Move toward broadband 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 Sources: Comsys, Clarkson, Lindberg International and Euroconsult Growth possibilities in all market segments 37 10 October 2013
Multiple Drivers Underpin Growth Demand for operational efficiencies, crew welfare and safety 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 Generating future organic growth by enabling the increased flow of information 38 10 October 2013
Continuing Regulatory Requirements Offerings for SOLAS and radio communications Adjacent technologies AIS Class A Navtex GPS 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 Safety and piracy GMDSS LRIT SSAS Reduce total cost of ownership 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 Adjacent technologies, product integration and focus on total cost of ownership drive growth 39 10 October 2013
Satcom Development Demand for more bandwidth and standardized solutions Inmarsat A Inmarsat B and Fleet Inmarsat FleetBroadband Demand driven by smaller hardware, need for IP data connectivity and standardised solutions Traditional VSAT Tomorrows VSAT C- and Ku-band - C-band very reliable, weather resistant - C-/Ku-band highly configurable, customised - Heavy antennas Growth drivers - Effective hardware - Standardised packages Ku/Ka-band with L-band - Lighter and smaller antennas - Standardised solutions - Higher throughput Continued request for more data drives VSAT growth in all segments 40 10 October 2013
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. 41 10 October 2013
Segments and Applications Land 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 Gov. BGAN 100% = GBP ~30 million Market segments 100% = GBP ~230 million Energy Transport. Aid Media Share of market VSAT 100% = GBP ~200 million Cobham 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) All Others Cobham All Others Strong BGAN position combination of businesses offers VSAT growth opportunities AvL ND Indra Satcom GD Vertex RC Duluth Sources: SATCOM estimates 42 10 October 2013
Land Market Going Forward Inmarsat GX and VSAT opportunities 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 43 10 October 2013
Introducing EXPLORER 710 A new ultra-portable BGAN terminal EXPLORER 700 EXPLORER 710 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 710 the smallest terminal in its class 44 10 October 2013
EXPLORER 710 The HDR difference 45 10 October 2013
The EXPLORER 325 Push-to-Talk Ruggedized solution for mobile work forces 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) Expand the addressable BGAN market through applications focus 46 10 October 2013
Elektro Brazil Replaced VHF radio network with EXPLORER Push-To-Talk 47 10 October 2013
Aero The aeronautical products comprise communication equipment for corporate, government and commercial airline aircrafts. The products support cockpit and passenger voice and data applications.
Segments and Applications Aero Voice and data solutions (L-band) to support aircraft, cockpit and cabin communication Market segments 100% = GBP ~170 million Regulatory requirements and safety services - Aircraft Traffic Control - Airline Info Services Passenger information and entertainment services Government Business Aviation Air Transport Support of Unmanned Aerial Vehicles (UAVs) Share of market 100% = GBP ~170 million Transmission of real-time surveillance data, e.g. ship oil-spill and bushfires All others Cobham Coordination of rescue and maritime anti-piracy operations Rockwell Collins Honeywell Sources: SATCOM estimates Demand for connectivity for both cockpit and cabin 49 10 October 2013
Aero Market Going Forward New products and services drive growth 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 Sources: Honeywell and Boeing Strong competitive advantage with new product portfolio 50 10 October 2013
Cobham Experience Satcom antennas for cockpit and cabin communications 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 is the preferred choice on a large number of aircraft models 51 10 October 2013
Aircraft Communication Segregation Ideal match with the L-band capabilities of Cobham 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 Cockpit Cabin Aircraft Control: (AC/ATC) Operational (AIS/AOC): Airline Info Services 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 Attractive growth opportunities in Air Transport 52 10 October 2013
AVIATOR S Series Technology improvements to meet customer demand Typical ARINC 781 ship set IP Data (1 SBB Channel) ACARS Data Segregation between ATC Data and AOC Data Safe Voice New AVIATOR 200S ship set 6MCU Box 11.5 kg Flat Pack DLNA 2.5 kg High Gain Antenna 10 kg Power consumption: 200W Total weight min. 24 kg 2MCU Box Antenna Total weight < 6 kg Power consumption: 50W Drag on Antenna approx. 40 % less than HGA-7001 Same functionality in a much smaller package 53 10 October 2013
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. 54 10 October 2013
Segments and Applications Systems Infrastructure for satellite networks such as Inmarsat and its service providers A market highly dependent on Inmarsat introducing new services Satellite The most important revenue driver is Inmarsat BGAN expected to continue for the coming years Land Earth Station PSTN / INTERNET Land earth stations with equipment Approximately 60 gateways to 20 locations around the world. Cobham has delivered almost all Inmarsat gateways in service 55 10 October 2013
Summary 10 October 2013
SATCOM Strategy in Summary 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 57 10 October 2013
Agenda 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 09.45 Break 10.00 SATCOM management presentation (part II) Walther Thygesen, SVP 10.45 Q&A on presentation, followed by short break 58 10 October 2013
Agenda 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 management 13.30 End of Q&A 13.30 Closing Comments Simon Nicholls, Cobham CFO 13.45 Depart Lyngby 59 10 October 2013
Investor Day Site Tour Program 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. 2. Test tower - VSAT Christian M. Petersen (10 min.) Location: Test Tower 3. Aero Kim Bille Gram, Peter Thrane & Bror Malm (10 min.) Location: 1.N. 4. Technology platforms and production E710 Claus Borum & Richard Lassen (10 min.) Location: Ground F. / Production Group 1: Walther Thygesen, John Alexandersen (time keeper) 1. Technology platforms and production E710 Claus Borum & Richard Lassen (10 min.) Location: Ground F. / Production 2. Antenna technology Anders Pjetursson, Carsten Thomsen and Vibeke Fink (10 min.) Location: 2.W. 3. Test tower - VSAT Christian M. Petersen (10 min.) Location: Test Tower 4. Aero Kim Bille Gram, Peter Thrane & Bror Malm (10 min.) Location: 1.N. Group 2: Simon Nicholls, Svend Åge Lundgaard (time keeper) 1. Aero Kim Bille Gram, Peter Thrane & Bror Malm (10 min.) Location: 1.N. 2. Technology platforms and production E710 Claus Borum & Richard Lassen (10 min.) Location: Ground F. / Production 3. Antenna technology Anders Pjetursson, Carsten Thomsen and Vibeke Fink (10 min.) Location: 2.W. 4. Test tower - VSAT Christian M. Petersen (10 min.) Location: Test Tower Group 3: Richard Tyson, Julian Wais (time keeper) 60 10 October 2013
Glossary ACARS AIS BGAN COTM GMDSS GPS GX IMO IP LRIT M2M MSS Navtex PSTN PTT Satcom SBU SOLAS SSAS VSAT Aircraft Communications Addressing and Reporting System Automatic Identification System Broadband Global Area Network Communications On The Move Global Maritime Distress Services System Global Positioning System GlobalXpress International Maritime Organisation Internet Protocol Long Range Identification and Tracking Machine-To-Machine Mobile Satellite Services Navigational Telex Public Switched Telephone Network Push-To-Talk Satellite communication Strategic Business Unit Safety Of Life At Sea Ship Security Alert Systems Very Small Aperture Terminal 61 10 October 2013
Cautionary Statement 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. 62 10 October 2013
The most important thing we build is trust 63 10 October 2013