MAXR September Investor Presentation FINALs22.q4cdn.com/.../2019/09/MAXR_September-Investor-Presentation_… · See supplemental financial information found on the company’s website

September 2019 Investor Presentation

© 2019 Maxar Technologies 2

This presentation and question and answer session associated with it contain certain “forward-looking statements” or “forward-looking information” under applicable securities laws. Forward-looking terms such as “may,” “will,” “could,” “should,” “would,” “plan,” “potential,” “intend,” “anticipate,” “project,” “target,” “believe,” “plan,” “outlook,” “estimate” or “expect” and other words, terms and phrases of similar nature are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on certain key expectations and assumptions made by the Company. Although management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Any such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results and expectations to differ materially from the anticipated results or expectations expressed in this Earnings Information. The Company cautions readers that should certain risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected.

The risks that could cause actual results to differ materially from current expectations include, but are not limited to those set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K which is available online under the Company’s EDGAR profile at www.sec.gov or on the Company’s website at www.maxar.com, as well as the Company’s continuous disclosure materials filed from time to time with Canadian securities regulatory authorities, which are available online under the Company’s SEDAR profile at www.sedar.com or on the Company’s website at www.maxar.com. The risk factors detailed in the foregoing are not intended to be exhaustive and there may be other key risks that are not listed above that are not presently known to the Company or that the Company currently deems immaterial.

The forward-looking statements contained in this Earnings Information are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon data available as of the date of this Earnings Information or other specified date and speak only as of such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements herein as a result of new information, future events or otherwise, other than as may be required under applicable securities law.

Caution concerning forward looking statements


Driving toward top-line growth− Growing government and commercial markets; aligned well with National Defense Strategy− Unique capabilities and franchises across Earth Intelligence and Space Infrastructure− Flexible and agile commercial approach to move fast in addressing customer requirements

Levers to expand profit margins over time− Re-engineering and variablizing cost structure− Mix and productization of services

Moving toward a lower capital intensive model that can drive ROIC higher− Smaller capital footprint across manufacturing and satellite operations− Rapid Access, SecureWatch, EarthWatch, Global-EGD, etc.

Committed to maintaining financial flexibility in order to address growth opportunities− CapEx holiday post Legion build− Target leverage of < 4.0x net debt-to-Adj. EBITDA over time

Key Take-a-ways


Leader in Earth Intelligence and Space Infrastructure providing geospatial data and analytics, satellites, space robotics, and space infrastructure to commercial and government customers globally

Strong alignment with:

− US National Defense Strategy

− Missions of International Defense and Intelligence customers

− Evolving requirements of civil government customers

− Pursuit of innovation with commercial customers

Overview of Maxar Today

Imagery$845M

Services$266M

Space Systems$1,129M

FY18 Revenue

$2.2B


Large and growing addressable markets

USGovernment

Persistent global security threats

Rising defense budgets

Increasingly seeking to use viable commercial alternatives

Imagery and insights in great demand

Space is a focus of investment

International Governments


Rising budgets

Imagery and insights in great demand


Nascent but growing services opportunities

Commercial

Strong imagery demand driven by new use cases enabled by Artificial Intelligence (AI) and Machine Learning (ML)

Space-based remote-sensing pipeline experiencing growth

LEO communications programs underway (OneWeb) and in the pipeline (Telesat)


Hundreds of diverse and complex customers across the globe

Government Customers Commercial Customers


Strategy focused on Earth Intelligence & Space Infrastructure

Space Infrastructure Earth Intelligence

Components

Customer Value Chain

SystemsSubsystems Data/Products Services/Solutions

Solar ElectricPropulsion

SpaceRobotics

Satellite and Systems

integration

Satellite Hardware

Groundsystems

Geospatial data & products

PlatformsDefense services &

solutions

Maxar Franchise Products / Major Contracts

Imagery

- EV Follow-On- Direct Access- Rapid Access

GEOINT Platforms

- Earth & Secure Watch- GBDX- Global-EGD

Services

- SBIR Phase III- Multiple Classified

Satellites

- 1300 Class- Legion Class- PPE

Robotics

- Restore-L- Canadarm- Dragon Fly

1

2

3

GEOINT Products

- Basemap- Advanced Elevation- Building Footprints

Antennas

- LEO

- GEO


Solid alignment with US National Defense Strategy

Space & Cyber C4ISRMissileDefense Joint Lethality

Forward Force Resilience

AutonomousSystems

Resilient space assets and ops.

Gain and exploitinformation

Layered missile defense

Ability to strike Ability to operate in all domains

Autonomy, AI, and Machine Learning

• Satellite manufacturing

• Space Robotics• Space Infrastructure• Solar Electric - Chem

Propulsion

• Imagery• AI and ML• Space-based sensors• Direct Downlink• Products

• AI and ML for early warning

• Satellite Buses

• High resolution elevation

• Real-time Geo-positioning

• 3D Imagery

• Direct Downlink• Crosslinks / interfaces• Living Maps• Message generation

• Imagery• Co-Registered

Mapping Data• Space robotics• Change / Object

Detection

• Satellite design and manufacturing

• Space Robotics• Space Infrastructure• Solar Electric -

Chemical Propulsion• Cyber-secure

systems

• High resolution Imagery

• AI and ML providing change detection

• Space-based sensors• Direct Downlink• Analytics / cloud-

based products

• AI and ML providing change detection for early warning

• Affordable and secure satellitebuses

• Sensor Platforms

• High resolution elevation models

• Real-time Geo-positioning

• 3D Imagery• Shareable GEOINT• Analytics / cloud-

based products

• High resolution Imagery• Direct Downlink• Crosslinks / interfaces• Living Maps

• High resolution Imagery

• Co-Registered Mapping Data

• Space robotics• AI / ML providing

change detection

© 2019 Maxar Technologies 9Failed Safir Rocket Launch | Imam Khomeini Space Launch Complex, Iran | Image Tweeted By POTUS on August 30, 2019

POTUS Tweeted Image


Failed Safir Rocket Launch | Imam Khomeini Space Launch Complex, Iran | August 31, 2019 | Maxar WorldView-3 Satellite Image

WorldView-3 Image31-cm resolutionCollected at 3.6° off-nadir

Maxar Copyright 2019 | All Rights Reserved


Failed Safir Rocket Launch | Imam Khomeini Space Launch Complex, Iran | August 29, 2019 | Maxar GeoEye-1 Satellite Image

GeoEye-1 Image41-cm resolutionCollected at 42° off-nadir



Failed Safir Rocket Launch | Imam Khomeini Space Launch Complex, Iran | August 29, 2019 | Maxar WorldView-2 Satellite Image

WorldView-2 Image46-cm resolutionCollected at 33° off-nadir



Failed Safir Rocket Launch | Imam Khomeini Space Launch Complex, Iran | August 29, 2019 | Planet Labs Satellite Image via NPR.org

Planet SkySat Image72-cm resolutionCollected at 10° off-nadir


Growing International Defense and Intelligence (IDI) Demand

IDI Market Environment


Rising budgets

Imagery & insights in great demand


Nascent but growing services opportunities

Maxar Capabilities

Geospatial data and products

Machine Learning and Analytics

Defense services and solutions

Satellite and system integration

Space robotics

Ground systems


Multifaceted opportunities with civil agencies

NASA exploration efforts focused on deep space align well with Maxar Capabilities

• Space robotics• Solar electric propulsion• Examples: PPE and Restore-L

NASA science efforts focused on better understanding our planet

• Geospatial data and products• Machine learning and analytics• Examples: TEMPO, Psyche, and Mars Rovers,

as well as multiple geospatial data programs

Other civil agencies focused on emergency response, urban planning, and regulatory compliance benefit from company's capabilities

• Geospatial data and products• Machine learning and analytics• Examples: Multiple projects and products

deployed globally


Commercial demand driven by innovation and new use cases

Earth Intelligence Applications Capabilities

• Autonomous applications

• Wireless network planning

• Resource planning

• Risk Management and Mitigation

• High resolution imagery

• Mapping

• Change detection

• Data analytics and machine learning

Space Infrastructure Applications Capabilities

• Voice and Data Communications

• Imagery

• Remote sensing

• Video distribution

• Satellite design

• Satellite integration

• LEO and GEO

• Ground Systems


Recent challenges

Stabilization of Palo Alto/ Positioning for Growth

Temporary lull in major Canadian projects

Loss of WorldView-4 ahead of Legion

constellation in 2021

Re-engineering and optimization of operating

model post merger

High Current Leverage


Progress against near-term priorities

Reduce debt and leverage

Lower debt but higher leverage q/q in 2Q19

Continue to drive on alternatives to reduce leverage and debt levels

Re-engineer Space Solutions business (legacy SSL)

Improving operational performance and re-engineering

Expanding TAM: Commercial, Civil, DoD/Classified

Solid new wins, including PPE and a GEO Comsat

Position MDA for long-term growth

Canadian Surface Combatant started; solid pipeline

Canadarm2 performing well; Canadarm3 in pipeline

Recent win: Robotic interfaces for Canadarm3

Position Earth Intelligence businesses (Imagery and Services) for long-term growth, drive Imagery to flat revenue & Adj. EBITDA in 2019, & recover insurance proceeds for WV-4

$10M to $15M rev. shift from WV-4 under contract

Wins: study w/ NRO; Vricon OWT, new RAP customer

Full recovery of $183M in insurance proceeds

Reduce cost structure / Deploy new operating model

Material cost take outs in 1H19

On track for original merger synergy targets

On track for incremental $60M in year / $70M run rate

1

2

3

5

4


Multi-year view

Underway Medium-Term Longer-Term

Reset and S

tabili

ze

• De-lever and reduce debt

• Space Solutions (ex-SSL): Re-engineer

• MDA: Position for growth via new wins

• Imagery: Drive to flat revenue and EBITDA

• Services: Execute on growing backlog

• Deploy new operational model

• Peak satellite CapEx Retu

rnin

g to G

row

th

• De-lever and reduce debt

• Space Solutions: Position for growth by addressing Commercial, Civil, and DoD / Classified markets

• MDA: Growth driven by Canadian space and defense + commercial

• Imagery: Growth driven by subscriptions / products

• Services: Execute on backlog + new wins driven by AI/ML

• Declining satellite CapEx Accele

rate

/ O

ptim

ize

• Top-line growth• Higher Imagery capacity• Canadian space & defense• US & International services• Commercial, Civil, DoD /

Classified space

• Margin expansion• Mix and execution• Product / services adoption• OpEx leverage

• Lower capital intensity• Smaller manufacturing &

satellite capital footprint• Further penetration of services /

product offering

• Optimize capital structure


Leader in large and growing markets with technological differentiation and industrial lead

Trusted partner to the most complex and discerning government and commercial customers

Solid and growing number of long-term franchises

On a path to address near-term challenges – know what we have to do and are doing it

Summary


NON-GAAP FINANCIAL MEASURES

See supplemental financial information found on the company’s website www.maxar.com for reconciliation of the non-GAAP financial metrics found in this

presentation. In addition to results reported in accordance with U.S. GAAP, we use certain non-GAAP financial measures as supplemental indicators of

our financial and operating performance. These non-GAAP financial measures include EBITDA and Adjusted EBITDA.

We define EBITDA as earnings before interest, taxes, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for certain items affecting

comparability as specified in the calculation. Management believes that exclusion of these items assists in providing a more complete understanding of

our underlying results and trends, and management uses these measures along with the corresponding U.S. GAAP financial measures to manage our

business, evaluate our performance compared to prior periods and the marketplace, and to establish operational goals. Adjusted EBITDA is a measure

being used as a key element of our incentive compensation plan. The Syndicated Credit Facility also uses Adjusted EBITDA in the determination of our

debt leverage covenant ratio. The definition of Adjusted EBITDA in the Syndicated Credit Facility includes a more comprehensive set of adjustments.

We believe that these non-GAAP measures, when read in conjunction with our U.S. GAAP results, provide useful information to investors by facilitating

the comparability of our ongoing operating results over the periods presented, the ability to identify trends in our underlying business, and the comparison

of our operating results against analyst financial models and operating results of other public companies.

EBITDA and Adjusted EBITDA are not recognized terms under U.S. GAAP and may not be defined similarly by other companies. EBITDA and Adjusted

EBITDA should not be considered alternatives to net income (loss) as indications of financial performance or as alternate to cash flows from operations as

measures of liquidity. EBITDA and Adjusted EBITDA have limitations as an analytical tool and should not be considered in isolation or as a substitute for

our results reported under U.S. GAAP.

Appendix


Financial Outlook – 2019(Issued on August 6, 2019)

Other Noteworthy ItemsDepreciation and Amortization: ~$405MInterest Expense: ~$200MTax Rate: ~0%Share Count: ~61M

Amortization on Purchased Intangibles

EV Deferred Revenue / Imputed Interest

In $ millions

Amortization of acquired intangible assets is based on the period over which the Company expects to receive benefit from those assets. Assets are generally amortized on a straight-line basis.

In $ millions

Revenue is reported in the Imagery segment and relates to the Enhanced View (EV) contract signed in 2010 that expires in August 2020. There are no material costs associated with this revenue.

1 This is a non-GAAP financial measure. Refer to section “Non-GAAP Financial Measures” in the Appendix to these earnings slides.

2019 2020 2021

$120 $80 $0

2019 2020 2021 2022 2023 After

$234 $203 $145 $118 $47 $353

Imagery, Services, and MDA Adjusted EBITDA1

> $550M[Including Corporate expense but excluding Space

Solutions retention]

Space Solutions Adj. EBITDA1 Approximately Breakeven

Space Solutions Eliminations (~$20M)

Space Solutions Retention (~$20M)

Total Adj. EBITDA1 >$510M

Operating Cash Flow $350M to $450M(ex Space Solutions)

Space Solutions Op. Cash Flow ($100M) to ($80M)(excluding $20M in retention payments)

CapEx < $375M(excluding roughly $20M of capitalized interest)

Debt Covenant Add BacksConversion from US GAAP to IFRS + add backs allowed for under credit agreement

Leverage Ratio for Covenant Calc. < 6.0x


Imagery: resilient business in growing market

Key Facts and Figures Pipeline and Outlook

2018: $845M in revenues with 61.3% Adj. EBITDA margins

Key Programs / Areas:⁃ EnhancedView⁃ Global-EGD⁃ Roughly a dozen DAFs⁃ 400+ commercial customers

Robust pipeline

USG: Classified and unclassified programs

IDI: SecureWatch, Legion-X, GEOINT services, etc.

Commercial: EarthWatch and other online platforms

Outlook

2019 outlook - flat y/y revenue and Adj. EBITDA

Medium-term outlook - growth driven by subscription / product adoption

Longer-term outlook - Capacity growth as Legion comes on-line in 2021

Satellite Imagery Information Products Subscription Access Analytics

Capabilities


Services: continued growth and stable margins


2018: $266M in revenues with 9.4% Adj. EBITDA margins

Key Programs / Areas:⁃ SBIR Phase III AI & Predictive Analytics ⁃ Classified Intel Mission Support ⁃ Classified Space ISR Mission ⁃ NGA Janus Geography GEOINT

Major Pipeline Pursuits:

Classified DoD Predictive Analytics

Classified GEOINT Data Processing

Army Remote Ground Terminal Program

DHS and International Defense GEOINT Prod

Outlook

2019 outlook - low single digit rev. growth and ~10% Adj. EBITDA margins

Medium-term outlook - Driven by recent growth in backlog and US government demand

Longer-term outlook - Driven by demand for insights from geospatial data and further penetration of international markets

Sensor & Ground Modernization Data to Insight Agile Intelligence

Capabilities


Space Systems: opportunities for growth & improved profitability


2018: $1.1B in revenues with 0.4% Adj. EBITDA margins

Noteworthy non-GEO Comsat programs:⁃ Restore-L⁃ OneWeb⁃ PPE for Artemis program⁃ ISS Robotics⁃ Psyche⁃ Canadian Surface Combatant

Pipeline

LEO and GEO programs

Classified Programs

Canadarm 3 for Lunar Gateway

Other civil: robotics, exploration, servicing, etc.

Outlook

2019 outlook - MDA: Mid-single digit rev. decline & several hundred bps. margin compression. Space Solutions (legacy SSL brand): Improved Adj. EBITDA and cash flow headwinds y/y.

Medium-term outlook - MDA: Driven by Canadian space and defense programs as well as commercial satellite opportunities. Space Solutions: Driven by execution, timing of milestone payments & new orders for 1300 & Legion-class buses.

Longer-term outlook - MDA: Driven by Canadian space and defense programs, penetration of export markets, and commercial satellite programs. Space Solutions: execution and new orders for 1300 and Legion-class buses.

Satellite Components &

Payloads

Satellite Ground Stations

Communications Satellites

Radar SatellitesRemote Sensing

SatellitesRobotics Defense Systems

Capabilities


Contact Information

MAXAR.COM

Documents

MAXR September Investor Presentation FINALs22.q4cdn.com/.../2019/09/MAXR_September-Investor-Presentation_… · See supplemental financial information found on the company’s website