C2SAT Financial Hearings - Fredrik Nygren, CEO February 2010 - - PowerPoint PPT Presentation

C2SAT – Financial Hearings

• Fredrik Nygren, CEO

February 2010

Today’s agenda

• C2SAT - In a nutshell
• 2009 – A year of change
• Established targets
• The VSAT market –

Promising growth prospects

• The VSAT market –

Service Providers

• The VSAT market –

“Hardware suppliers”

• C2SATs products -

Unique, patented and superior

• Agenda for 2010

C2SAT – In a nutshell

• Develops, manufactures and sells stabilized antenna systems, VSAT,

for the maritime market.

• The C2SAT antenna is unique with a patented 4-Axis design and

superior tracking performance and pointing accuracy, but also a more robust design.

• In 2009, the C2SAT product, developed since 2000 and first “show

cased” in 2007, moved from development phase to full commercial roll-out.

• C2SAT, with 19 employees, has it its head office in Solna, Sweden, and

production in Söderhamn, Sweden, and Singapore. C2SAT also has a sales-office in Singapore and both representationoffice and a license manufacturer in Shanghai, China.

• Since October 2001 C2SAT is listed on the NGM Equity Exchange with

approx 5 000 shareholders.

2009 – A year of change

• New management team in place
• Restructing and reorganisation of ongoing operations
• New and transparant targets established
• Sales team in place
• Strengthened capital base
• New distributor-, service and installation partners
• New production sources
• Industrialisation of the products and quality assurance
• Important new reference clients - Orange Business Service and Thales

Established Targets

• To reach a 15 % market share.
• To be one of the three leading global VSAT suppliers.
• To post at least 50 % sales growth, quarter on quarter.
• To achieve a sustainable gross margin in excess of 30 %.
• To be cash flow positive.

The VSAT Market – Promising growth prospects

• 500

1 000 1 500 2 000 2 500 3 000 3 500 4 000 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total Demand New Installments Replacements

Källa: Comsys

• In the current year the number of

VSAT installations is forecast to be about 3 000 units, bringing the total number of VSAT installation up to about 10 000 units.

• The maritime VSAT market is

expected to grow by 25 – 30 % per annum over the next 3 years. Thereafter, further strong growth can be expected since market penetration will by 2012 only have reached therefore 40 %.

The VSAT Market – Promising growth prospects

• Increasing demand for maritime communication services favours VSAT,

since user expectations are increasingly to have the same connectivity at sea as on land. Furthermore, new applications are developed on the basic assumption of full broadband connectivity.

• A prominent growth driver is also the ongoing shift away from Inmarsat,

still the industry standard, in favour of VSAT. Inmarsat, currently has close to 200 000 installations, but limited capacity and costly pricing model, priced on volume compared to VSAT’s flat fee model.

• There is also an expanding VSAT replacement market, based on a life

span of 5 years for a typical VSAT, with 2011 being the first year the replacement market has a significant impact on overall demand, with replacements representing close to 20 % of the total demand for VSAT.

The VSAT Market – Promising growth prospects

• C2AT will grow its market share together with its distributors. In 2009,

C2SAT has added a number of strategically important distribution

• agreements. The agreement with Orange, key brand of France Telecom,

is by far the most important for C2SAT’s future growth. Orange has formed a dedicated business area for maritime communication and appointed C2SAT as preferred supplier.

• Orange aims to be a leading player in maritime VSAT communications.

Orange has the resources and a unique offering compared to established maritime operators. Orange can offer integrated terrestrial and satellite services.

The VSAT Market – The Service providers

• Typically, the shipowner will buy a bundled communication service package from

a system integrator/telecom operator in which the VSAT antenna is included. Pricing will be based on a fixed monthly fee for a period of typically 3-5 years.

• At current there are about 80 system integrator/telecom operators which offer

maritime communication based on VSAT solution.

• The 10 largest control about 70% of the market. The most important, to date, are

Vizada (10%), ShipEquip (8%) and Schlumberger (6%).

• Up until 2008, underlying growth for VSAT solutions was driven by users within

”Cruise & Ferry” and ”Oil & Gas”, ”robust” was then not a key issue. Growth is now being driven by users in ”Commercial shipping” and ”Offshore supply”, where robust is a key issue.

The VSAT Market – The hardware suppliers

• The VSAT ”hard ware market”, i.e. antennas is currently dominated by two

suppliers, SeaTel Inc, with a market share of about 70% and Orbit Technology Group Ltd, with a market share of 15%.

• C2SAT, is one of about ten smaller VSAT antenna suppliers. C2SAT market

share in 2009 was about 1%.

• Most of the smaller suppliers are South East Asian based and offer 3-Axis

antennas, ”SeaTel look-a-likes”, at competitive prices. Alternatively, they are highly niched players, such as Schlumberger (offshore), with 4% market share, or choose to offer other bundled services, including airtime, such as KVH.

C2SATs product – unique, patented and superior

TM

Four Axes Enables Accuracy and High Speed

TM

C2SATs product – unique, patented and superior

• The C2SAT product range (C- to Ku-band) is based on a modular

design, with the same software and user interface, which simplifies service and maintenance.

• The robust design in itself reduces the need for maintenance,

expands the life-cycle and reduces cost of ownership.

• The 4-Axis design solves high elevation problems (the Zenith

paradox), a truly unique quality.

• C2SAT patented solution gives superior tracking and pointing

accuracy which ensures optimal use of bandwidth and higher average transmission speed.

C2SATs product portfolio

2.4m C-band 1.2m Ku-band 1.2m Ku-band - 4M

Agenda for 2010

• Reach set sales targets
• Continue to build C2SATs organisation
• Continue to expand the service- and installation network
• To add future distributors
• Continued focus on quality assurance,

ability to deliver and cost cutting

Q & A