- Revenues of €1,478m down 2.2%
like-for-like1
- EBITDA margin of
76.7%2, up from 76.2%
- Group share of Net Income of
€351.8m, up 0.9%
- Discretionary Free-Cash-Flow
significantly ahead, by 65%
- Proposed dividend of €1.21 per
share, up 10%
- All financial objectives confirmed
or raised
Regulatory News:
The Board of Directors of Eutelsat Communications (Paris:ETL)
(ISIN: FR0010221234 – Euronext Paris: ETL) met yesterday under the
chairmanship of Michel de Rosen and reviewed the financial results
for the year ended 30 June 2017.
Key Financial Data FY
2015-16
FY
2016-17
Actual
change
Like-for-like
change
Revenues - €m 1,529.0
1,477.9
-3.3% -2.2%1
Profitability
EBITDA3 €m
1,164.6
1,133.6 -2.7%
- EBITDA margin - %3 76.2
76.72
+0.5 pts - Group share of net income -
€m 348.5
351.8 +0.9%
- Financial structure Cash Capex3 514.4
414.4 -€100.0m - Discretionary
free-cash-flow3 247.3
407.8
+€160.5m - Net debt - €m 4,006.8
3,640.7 -€366.1m Net debt/EBITDA
– x3 3.4
3.2 -0.2 pts
- Backlog – €bn 5.6
5.2
-7.6% -
Rodolphe Belmer, CEO of Eutelsat Communications, said: “During
the past year, we have delivered or over-delivered on all our
financial commitments. In particular, our strong performance on
free cash flow generation has enabled us to reduce net debt to
below 3.3x EBITDA, and to recommend a strong, 10% rise in dividend.
Our performance was supported by solid commercial momentum in our
core video business and in other verticals – particularly mobile
connectivity, as well as the strengthening of our financial
profile. In consequence, we are on track to achieve top-line
stability in FY 2017-18, with a return to slight growth
thereafter.
“The successful execution of our LEAP cost-savings plan will
help us deliver an EBITDA margin above 76% in FY 2017-18, and we
are raising our target for FY 2018-19 and beyond to above 77%. We
also maintain our commitment to free cash flow growth, where we
target mid-single digit compound growth for the next three years
off the extremely high base achieved in FY 2016-17, with growth
back-end loaded in the outer two years. This will enable us to
further deleverage, with net debt / EBITDA now forecast below 3.0x
within the next couple of years, while continuing to serve a stable
to progressive dividend to our shareholders.
“At the same time, we are laying the foundations for long term
value-creation, with a strong focus on securing durable capex
efficiencies while paving the way for step up in growth in the
early 2020s, supported by our Connectivity verticals.”
1 At constant currency and perimeter2 76.6% at constant
currency3 Alternative performance indicators. Please refer to the
appendix 3 for more detail.
HIGHLIGHTS OF THE YEAR
Delivery or over-delivery on all financial
objectives:
- Revenues in line with expectations at
-2.2% like-for-like
- EBITDA margin target raised and
exceeded
- Discretionary Free Cash Flow growth
significantly ahead of expectations at +65%
- Net Debt / EBITDA below 3.3x
- Dividend per share recommended at
€1.21, up 10%
Solid commercial performance:
- In Video
- HD take-up accelerating on
HOTBIRD;
- Significant contract renewals in Europe
and in MENA with Arqiva at 28° East, and Digiturk at 7° East;
- Multi-year, multi-transponder contract
with NTV-Plus on Express-AT2 to reach homes in Far Eastern Russia
and incremental capacity on Express-AT1 to consolidate coverage of
Siberia.
- In Government Services, a satisfactory
outcome of renewal campaigns with the US Department of
Defense;
- In in-flight Connectivity, contracts
with ViaSat on KA-SAT to provide capacity for SAS, Finnair and
Icelandair, with Taqnia for the HTS payload of EUTELSAT 3B and to
provide resources for Panasonic on EUTELSAT 115 West B;
- Selection of EUTELSAT 5 West B by the
European Global Navigation Satellite Systems Agency (GSA) for the
next-generation EGNOS payload, a contract valued at c.€100 million
over 15 years from 2019-20.
Strengthened financial profile:
- Successful launch of the ‘LEAP’
cost-savings plan, to generate €30 million in annual savings in
2018-19;
- Repayment of the March 2017 €850
million bond, generating €30 million in savings from fiscal year
2017-18;
- Refinancing of several credit lines and
pre-hedge of the January 2020 €930 million bond for an outstanding
amount of €500 million;
- Agreement to sell Hispasat stake to
Abertis for a €302 million consideration, and other non-core asset
disposals.
Laying the foundations for ongoing value creation:
Securing durable cash-flow generation through capex
efficiencies:
- EUTELSAT 5 West B satellite procurement
with ‘design-to-cost’ policy enabling Capex savings of more than
30%;
- Increased choice in the launcher market
through a contract with Blue Origin for a launch on the New Glenn
rocket, and multi-launch agreement with Arianespace for the
launches of EUTELSAT 7C, Eutelsat Quantum and the African Broadband
Satellite.
Preparing the ground for future revenue growth:
- Launch of EUTELSAT 172B in June 2017
with a coverage of Asia-Pacific;
- Launch of Russian Broadband
programme;
- Ka-band capacity secured from Yahsat
enabling the commercial launch of Konnect Africa in June 2017;
- Joint-venture with ViaSat paving the
way for a step-up in Connectivity top-line from the early
2020s.
REVENUES4
Total revenues for FY 2016-17 stood at €1,477.9 million, down
2.2% at constant currency and perimeter. On a reported basis
revenues were down 3.3%, reflecting a 1.7 points negative perimeter
effect (disposal of Alterna’TV, Wins/DHI and DSAT Cinema) and a 0.6
points positive currency effect.
Revenues for the Fourth Quarter stood at €358.5 million, with a
like-for-like change of -3.1% year-on-year and -0.9%
quarter-on-quarter.
Unless otherwise stated, all variations indicated below are on a
like-for-like basis.
4 i) All revenue growth rates are at constant currency and
perimeter; ii) the share of each application as a percentage of
total revenues is calculated excluding “other revenues””. IFRS 15
norm will be applied to revenues from FY 2018-19 onwards.
Revenues by business application
Previous reported
applications
Pro-forma: New applications Variation
In € millions
FY 2015-16
In € millions
FY 2015-165
FY 2016-17 Vs. reported revenues
Like-for-like change6
Video Applications 943.6 Video Applications
937.0
908.0 N/A -3.3% Data Services
230.0 Fixed Data 193.0
168.1
-14.0% Value-Added Services 107.8 Government
Services 180.8
176.1 -4.1% Government
Services 199.9 Fixed Broadband 81.1
96.2 +18.4% Other revenues 47.7 Mobile
Connectivity 60.0
74.6 +22.5%
Sub-total 1,529.0
Other revenues7
50.8
55.0 +7.5% Non-recurring revenues
- - - - -
Total
1,529.0 Total 1,502.6
1,477.9 -3.3% -2.2%
EUR/USD exchange rate 1.108
1.089
Core businesses
Video Applications (64% of revenues)
In FY 2016-17 revenues from Video Applications were down
3.3% like-for-like to €908.0 million.
Revenues from Broadcast were down 2.2%, reflecting the negative
impact of the rationalisation of capacity and the end of the TV
d’Orange contract at the HOTBIRD position as well as lower revenues
from FRANSAT off an exceptionally high base in FY 2015-16.
Excluding these two factors, Broadcast revenues would have risen
2.7%, notably on the back of the contribution of incremental
capacity launched during the course of FY 2015-16 (EUTELSAT 8 West
B and EUTELSAT 36C).
Professional Video revenues were down 12.4% year-on-year
reflecting the on-going tough competitive environment in this
application.
Fourth Quarter revenues stood at €224.3 million, down 5.4%
year-on-year and by 1.4% quarter-on-quarter.
At 30 June 2017 the total number of channels broadcast by
Eutelsat satellites stood at 6,630 (+288 year-on-year). High
Definition penetration continued to increase, representing 17.2% of
channels compared to 13.6% a year earlier, or a total of 1,142
channels, versus 863 a year earlier (+279).
Fixed Data (12% of revenues)
In FY 2016-17 revenues from Fixed Data were down 14.0%
like-for-like to €168.1 million.
They continued to reflect ongoing pricing pressure as a result
of a highly competitive environment in all geographies which is not
offset by additional volumes.
Fourth Quarter revenues stood at €41.1 million, down by 11.5% on
a year-on-year basis and by 0.8% quarter-on-quarter.
This confirms a sequential quarterly improvement since the
beginning of the year, but does not, however, alter Eutelsat’s
cautious view on this vertical in coming years.
Government Services (12% of revenues)
In FY 2016-17 revenues from Government Services were down
4.1% like-for-like to €176.1 million reflecting the carry-over
effect of lower renewals in the US Department of Defense Spring
2016 campaign. In FY 2016-17 commercial activity was much more
favourable with renewal rates of circa 90% in Fall 2016 and 85% in
Spring 2017, together with new contracts representing an additional
seven 36-MHz equivalent transponders.
Fourth Quarter revenues amounted to €44.8 million, up 6.1%
year-on-year and by 0.9% quarter-on-quarter.
5 Proforma revenues reflecting disposals of Alterna’TV, Wins/DHI
and DSAT Cinema. For more details, please refer to appendix 2.6 At
constant currency and perimeter.7 Other revenues include mainly
compensation paid on the settlement of business-related litigation,
the impact of EUR/USD currency hedging, the provision of various
services or consulting/engineering fees as well as termination
fees.
Connectivity
Fixed Broadband (7% of revenues)
In FY 2016-17 Fixed Broadband revenues stood at €96.2 million,
up 18.4% year-on-year. This reflected, on one hand the positive
effect of the entry into service in May 2016 of EUTELSAT 65 West A
- on which the Ka-band payload is fully leased - and a solid
European broadband performance driven by positive ARPU trends, and
on the other, the negative effect of the early termination of the
contract for Ka-band capacity on EUTELSAT 3B in December 2015
(since mostly resold to Taqnia and classified under Mobile
Connectivity).
Fourth Quarter revenues amounted to €23.4 million, up 5.0%
year-on-year and down by 2.2% quarter-on-quarter.
The launch of Konnect Africa in June 2017, and, to a lesser
extent the ramp-up of the Russian broadband programme, are expected
to support revenue growth next fiscal year.
Mobile Connectivity (5% of revenues)
In FY 2016-17 Mobile Connectivity revenues stood at €74.6
million, up 22.5% year-on-year, reflecting notably the effect of
the agreement with Taqnia for the sale of four spotbeams on the
High Throughput payload of the EUTELSAT 3B satellite as well as
widebeam capacity sales at several orbital slots, notably 172° East
and 21° East and over the Americas.
EUTELSAT 172B, successfully launched in June, will bring
additional capacity dedicated to this application in FY
2017-18.
Fourth Quarter revenues amounted to €18.9 million, up 30.8%
year-on-year, and 12.1% quarter-on-quarter.
Other revenues
In FY 2016-17 Other Revenues amounted to €55.0 million
compared with €50.8 million a year earlier. They included fees in
respect of technical and engineering services as well as, in the
first quarter, termination fees related to the rationalisation of
distribution at HOTBIRD. Since 1 January 2017, ‘Other Revenues’ no
longer include revenues related to the agreements with SES at 28.5°
East.
OPERATIONAL AND LEASED TRANSPONDERS
The number of operational 36 MHz-equivalent transponders stood
at 1,372 at 30 June 2017, up 44 over 12 months, mainly reflecting
the entry into service of EUTELSAT 117 West B in January 2017.
The fill rate stood at 67.9%, compared to 70.9% a year ago,
mostly reflecting the entry into service of the new capacity
mentioned above.
30 June 2016
30 June 2017
Number of operational 36 MHz-equivalent
transponders8
1,328 1,372
Number of leased 36 MHz-equivalent
transponders9
942 931 Fill rate 70.9% 67.9%
Note: Based on 36 MHz-equivalent transponders excluding
high throughput capacity (KA-SAT 82 spotbeams, EUTELSAT 3B 5
Ka-band spotbeams, EUTELSAT 65 West A 24 Ka-band spotbeams,
EUTELSAT 36C 18 Ka-band spotbeams and 16 spotbeams leased on Al-Yah
2 satellite).
BACKLOG
Note: The backlog represents future revenues from capacity lease
agreements and can include contracts for satellites under
procurement.
At 30 June 2017, the backlog stood at €5.2 billion, down 8%
compared to 30 June 2016. Contracts during the year included
notably the agreement with Taqnia for high throughput capacity on
EUTELSAT 3B and agreements with NTV Plus at 56° East and 140° East
as well as renewal of capacity with Digiturk at 7° East and Arqiva
at 28° East. The backlog was equivalent to 3.5 times 2016-17
revenues with 85% represented by Video, the same level as at 30
June 2016.
30 June 2016
30
June 2017 Value of contracts (in billions of euros) 5.6
5.2 In years of annual revenues based on last fiscal year
3.7
3.5 Share of Video Applications 85%
85%
8 Number of transponders on satellites in stable orbit, back-up
capacity excluded.9 Number of 36 MHz-equivalent transponders leased
on satellites in stable orbit.
PROFITABILITY
EBITDA amounted to €1,133.6 million (€1,164.6 million at
30 June 2016), down 2.7%.
Despite lower revenues, the EBITDA margin stood at 76.7%
(76.6% at constant currency), compared to 76.2% last year,
reflecting the early benefits of cost-savings measures, a lower
level of bad debt and the positive impact on margin of the disposal
of Wins/DHI.
Group share of net income stood at €351.8 million versus
€348.5 million in 2015-16, an increase of 0.9%. The net margin
stood at 23.8%. This reflected mainly:
- Lower EBITDA;
- An increase in the depreciation
charge of €32.3 million principally due to the entry into
service of new capacity in the past 18 months (EUTELSAT 8 West B
and EUTELSAT 115 West B in October 2015, EUTELSAT 36C in February
2016, EUTELSAT 9B in March 2016 and EUTELSAT 65 West A in May 2016
and EUTELSAT 117West B in January 2017);
- ‘Other operating income’ of
€14.1 million reflecting mainly the capital gain on the disposal of
Wins/DHI;
- A financial result of -€130.9
million, slightly less favourable than last year (-€123.0 million)
on the back of lower capitalised interest and the full-year impact
of the financial lease of the EUTELSAT 36C satellite;
- A tax rate of 24.8% versus 37.1%
last year, mainly reflecting the recognition of a positive non-cash
one-off element related to deferred tax liabilities reflecting the
upcoming reduction in French corporate tax rate to 28% in 2020 and
the partial tax exemption of the capital gain in respect of the
disposal of Wins/DHI;
- The absence of significant income
from associates (compared to €23.5 million in 2015-16), as the
stake in Hispasat is classified as an asset held for sale.
CASH-FLOW
Net cash flow from operating activities stood at €982.9
million compared to €895.7 million in 2015-16, up €87.2 million.
The decrease in EBITDA was more than offset by lower tax paid,
relating to the timing of tax payments and the reduction of the tax
rate in France as well as a more favourable evolution in working
capital than last year notably on the back of actions taken to
optimise days sales outstanding (DSO).
Cash Capex10 amounted to €414.4 million in FY 2016-17
compared to €514.4 million a year earlier, showing the first
results of the ‘design-to-cost’ approach and a strong reduction in
on-ground capex. This amount is net of the €132.5 received from
ViaSat following the agreement reached in February.
Interest and other fees paid net of interest received
stood at €160.7 million (€134.0 million in 2015-16); the €26.7
million increase reflected notably the full-year impact of interest
related to the financial lease of EUTELSAT 36C (which entered into
service in February 2016) and the payment of the coupon on the bond
issued in June 2016.
As a result, Discretionary Free-Cash-Flow11 stood at
€407.8 million at 30 June 2017, up by €160.5 million versus a year
earlier or 65%.
FINANCIAL STRUCTURE
At 30 June 2017 net debt stood at €3,640.7 million versus
€4,006.8 million a year earlier. Discretionary free cash-flow more
than covered the dividend payments (€266.2 million) while equity
asset disposals (predominantly Wins/DHI) generated a cash inflow of
€54.7 million; export credit financings and financial leases -
which are progressively repaid - decreased by €140.012 million.
As a result, the net debt to EBITDA ratio stood at 3.2 times, a
0.2 points improvement on 30 June 2016.
Throughout the year, Eutelsat continued to optimise its
debt:
- The option to extend by one year the
maturity of the €600 million term loan and of the €200 million
revolving credit facility of Eutelsat Communications, was
exercised. These facilities will now mature in March 2022;
- Ahead of the refinancing of the €930
million bond maturing in January 2020, the 7-year-mid-swap rate for
an outstanding amount of €500 million has been pre-hedged at
1.12%;
- The €450 million Eutelsat S.A.
revolving credit facility maturing in September 2018 was refinanced
at attractive terms. The new revolving credit facility will mature
in April 2022 with two options for a one-year extension subject to
lender consent for each extension.
10 See Appendix 3 for the definition of this indicator11 See
Appendix 3 for the definition of this indicator12 Excluding amount
due to RSCC described in Appendix 3 (€95.2 million)
At 30 June 2017 the weighted average maturity of the Group’s
debt stood at 3.0 years, compared to 3.4 years at 30 June 2016. The
average cost of debt was 3.1% (after hedging), down from 3.5% in FY
2015-16.
Liquidity remains strong, with undrawn credit lines of €650
million and cash of €408.0 million.
DIVIDEND
On 27 July 2017 the Board of Directors agreed to submit for
approval at the 8 November 2017 Annual Meeting of Shareholders a
dividend of €1.21 per share compared to €1.10 last year, up by 10%,
in line with the Group’s commitment to serving a stable to
progressive dividend.
The dividend will be paid on 23 November 2017, subject to the
vote of the Annual Meeting of Shareholders.
OUTLOOK
All elements of the financial outlook are confirmed or
raised:
- Revenues for FY 2017-18 (at
constant currency and perimeter13) are expected to be broadly flat
with a return to slight growth from FY 2018-19.
- The EBITDA margin (at constant
currency) is expected above 76% for FY 2017-18. From FY 2018-19
onwards it is expected at above 77% (versus ‘heading towards 77% in
FY 2018-19’ previously).
- Cash Capex will be maintained at
an average of €420 million14 per annum for the period July 2017 to
June 2020 (versus July 2016 to June 2019 previously).
- After a rise of 65% in FY 2016-17,
Discretionary Free Cash Flow15 is expected to deliver
mid-single digit CAGR in the period July 201716 to June 2020 (at
constant currency), with growth back-end loaded in the outer two
years.
- The Group is committed to maintaining a
sound financial structure to support its investment grade credit
rating and now aims at a net debt / EBITDA ratio below
3.0x (vs. 3.3x times previously).
- It also retains its commitment to
serving a stable to progressive dividend.
FLEET DEVELOPMENTS
Nominal launch programme
The upcoming launch schedule is indicated below. Since the last
quarterly update in May 2017, EUTELSAT 172B has been launched.
Satellite1
Orbital
position
Estimated launch(calendar
year)
Main
applications
Main geographic coverage Physical
transponders
36 MHz-equivalent transponders / Spotbeams
Of which expansion EUTELSAT 7C 7° East H2 2018
Video Turkey, Middle-East, Africa 44 Ku
49 Ku 19 Ku EUTELSAT 5 WEST B 5° West H2 2018
Video Europe, North Africa 35 Ku 35 Ku
None EUTELSAT QUANTUM To be
confirmed
2019 Government Services Flexible
8 beams“QUANTUM”
Not applicable Not applicable African Broadband
satellite To be
confirmed
2019 Broadband Africa 65 spotbeams
75 Gbps 75 Gbps 1 Chemical propulsion satellites
(EUTELSAT QUANTUM, EUTELSAT 5 West B) generally enter into service
1 to 2 months after launch. Electric propulsion satellites
(EUTELSAT 7C and the African Broadband satellite) between 4 and 6
months. 2 Total capacity of the high throughput payload: 1.8 Gbps.
13 For fiscal year 2016-17, revenues on the basis of perimeter
as of 30 June 2017 stood at €1,472 million (excluding revenues from
Wins/DHI and DSAT Cinema which were sold during fiscal year
2016-17)14 Including capital expenditure and payments under
existing export credit facilities and long-term lease agreements on
third party capacity.15 Net cash-flow from operating activities –
Cash Capex - Interest and Other fees paid net of interest
received16 Discretionary Free-Cash-Flow of €407.8 million in FY
2016-17.
Procurement of new capacity
- In October 2016 EUTELSAT 5 West B was
procured to replace EUTELSAT 5 West A at the 5° West orbital
position;
- In October 2016 Eutelsat concluded an
agreement with Yahsat to use Ka-band capacity on the fleet of
Yahsat;
- Elsewhere, Eutelsat and ViaSat expect
to add the ViaSat-3 class satellite currently under construction
for the Europe, the Middle East and Africa (EMEA) region to the
joint venture later this calendar year after concluding final
contractual terms.
Changes in the fleet
- In August 2016 EUTELSAT 70D reached the
end of its operational life and was deorbited;
- In January 2017 EUTELSAT 117 West B
entered commercial service;
- In April 2017 EUTELSAT 48A reached the
end of its operational life and was de-orbited.
CORPORATE GOVERNANCE
In April 2017 Yohann Leroy was appointed Deputy CEO in addition
to his function as Chief Technical Officer, alongside Michel
Azibert, Deputy CEO and Chief Commercial and Development
Officer.
In June 2017 Miriem Bensalah Chaqroun left the Board of
Directors of Eutelsat Communications.
The Board of 27 July 2017 proposed, amongst others, the
following resolutions to be submitted to the vote of shareholders
present at the Annual General Meeting of 8 November 2017:
- Approval of the accounts;
- Dividend relating to Financial Year
2016-2017;
- Appointment of Dominique D’Hinnin
(currently permanent representative of FSP) as a Board Member.
Following the AGM and subject to the approval of this appointment,
Dominique D’Hinnin will replace Michel de Rosen who will step down
from his functions as Chairman and Board Member of Eutelsat
Communications;
- Appointment of Esther Gaide,
Paul-François Fournier and Didier Leroy as Board Members;
- Compensation of corporate officers and
compensation policy;
- Several financial resolutions.
RECENT EVENTS
In July 2017, Eutelsat repurchased the minority holding of
Inframed in BroadBand4Africa.
****
Note: This press release contains audited consolidated financial
statements prepared under IFRS, reviewed by the Audit Committee on
25 July 2017 and adopted by the Board of Directors of Eutelsat
Communications on 27 July 2017. These accounts will be subject to
the approval of shareholders of Eutelsat Communications at the
Annual General Shareholders Meeting of 8 November 2017.
Documentation
Consolidated accounts are available at
www.eutelsat.com/investors/index.html
Results presentation
Eutelsat Communications will hold a results presentation on
Friday, 28 July 2017 by conference call and webcast at
9:00 CET.
To join the call, please dial the following numbers:
- + 33 (0)1 76 77 22 74 (from
France)
- + 44 (0)330 336 9105 (from Europe)
- +1 719 325 2213 (from USA)
Access code: 9924963#
A live webcast will be available on:
http://www.eutelsat.com/en/investors.html
A replay will be available from 28 July, 14:00 CET to 4 August,
midnight by dialling the following numbers:
- + 33 (0) 1 70 48 00 94 (from
France)
- + 44 (0) 207 984 7568 (from
Europe)
- +1 719 457 0820 (from USA)
Access code: 9924963#
Financial calendar
Note: The financial calendar is provided for information
purposes only. It is subject to change and will be regularly
updated.
- 26 October 2017: First Quarter 2017-18
revenues
- 8 November 2017: Annual General
Shareholders’ Meeting
- 16 February 2018: First Half 2017-18
results
About Eutelsat Communications:
Established in 1977, Eutelsat
Communications (Euronext Paris: ETL, ISIN code: FR0010221234) is
one of the world's leading and most experienced operators of
communications satellites. The company provides capacity on 39
satellites to clients that include broadcasters and broadcasting
associations, pay-TV operators, video, data and Internet service
providers, enterprises and government agencies. Eutelsat’s
satellites provide ubiquitous coverage of Europe, the Middle East,
Africa, Asia-Pacific and the Americas, enabling video, data,
broadband and government communications to be established
irrespective of a user’s location. Headquartered in Paris, with
offices and teleports around the globe, Eutelsat represents a
workforce of 1,000 men and women from 32 countries who are experts
in their fields and work with clients to deliver the highest
quality of service. For more about Eutelsat please visit
www.eutelsat.com
Disclaimer
The forward-looking statements included herein are for
illustrative purposes only and are based on management’s current
views and assumptions. Such forward-looking statements involve
known and unknown risks. For illustrative purposes only, such risks
include but are not limited to: postponement of any ground or
in-orbit investments and launches including but not limited to
delays of future launches of satellites; impact of financial crisis
on customers and suppliers; trends in Fixed Satellite Services
markets; development of Digital Terrestrial Television and High
Definition television; development of satellite broadband services;
Eutelsat Communications’ ability to develop and market Value-Added
Services and meet market demand; the effects of competing
technologies developed and expected intense competition generally
in its main markets; profitability of its expansion strategy;
partial or total loss of a satellite at launch or in-orbit; supply
conditions of satellites and launch systems; satellite or
third-party launch failures affecting launch schedules of future
satellites; litigation; ability to establish and maintain strategic
relationships in its major businesses; and the effect of future
acquisitions and investments.
Eutelsat Communications expressly disclaims any obligation or
undertaking to update or revise any projections, forecasts or
estimates contained in this presentation to reflect any change in
events, conditions, assumptions or circumstances on which any such
statements are based, unless so required by applicable law.
APPENDICES
Appendix 1: Additional financial data
Revenues by business application in the Fourth Quarter (€
millions)
Previous reported
applications
Pro-forma: new applications Variation
In € millions
Q4 2015-16
In € millions
Q4 2015-16
Q4 2016-17 Vs. reported
revenues Like-for-like change Video Applications
235.6 Video Applications 235.7
224.3 N/A -5.4% Data Services 57.6
Fixed Data 45.1
41.1
-11.5% Value-Added Services 27.4 Government Services
40.7
44.8 +6.1% Government
Services 43.9 Fixed Broadband 22.2
23.4 +5.0% Other revenues 7.2
Mobile Connectivity 13.9
18.9
+30.8%
Sub-total 371.6 Other revenues
7.2
6.0 -21.0% Non-recurring
revenues - - -
-
- Total 371.6 Total
364.7 358.5 -3.5%
-3.1% EUR/USD exchange rate 1.125
1.082
Extract from the consolidated income statement (€ millions)
Twelve months
ended June 30 2016 2017
Change Revenues 1,529.0
1,477.9
-3.3%
Operating expenses17
(364.4)
(344.3) -5.5% EBITDA
1,164.6
1,133.6 -2.7%
Depreciation and amortisation18
(500.6)
(532.9) +6.5% Other operating income (charges)
(2.0)
14.1 n.a Operating income
662.0
614.8 -7.1% Financial result (123.0)
(130.9) +6.4% Income tax expense (199.8)
(120.1)
-39.9% Income from associates 23.5
(0.4) n.a Portion of net
income attributable to non-controlling interests (14.3)
(11.6) -18.9% Group share of net income
348.5
351.8 +0.9%
17 Operating expenses is defined as the sum of operating costs
and of selling, general & administrative expenses.18 Comprises
amortisation expense of €57.0 million corresponding to the
intangible asset “Customer Contracts and Relationships”.
Change in net debt (€ millions)
Twelve months ended June
30 2016 2017 Net cash flows from
operating activities 895.7 982.9
Cash Capex19
(514.4) (414.4) Interest and Other fees paid net of
interests received (134.0) (160.7)
Discretionary
Free Cash Flow 247.3 407.8
Acquisition / disposal of equity investments and subsidiaries 4.6
54.7 Distributions to shareholders (including non-controlling
interests) (109.6) (266.2)
Change in long-life leases and ECA debt
20
(289.8) 140.0 Change in foreign exchange portion of the
cross-currency swap (13.4) 26.0 Other (4.8) 3.8
Decrease (increase) in net debt (165.7)
366.1
Appendix 2: Quarterly revenues by application
Pro-forma revenues
Pro-forma revenues for FY 2015-16 were published with the H1
revenues release on 9 February 2017. They reflect:
- The disposal of some businesses:
Alterna’TV (Video) deconsolidated from April 2016, Wins/DHI (Mobile
Connectivity) deconsolidated from end-August 2016 and DSAT Cinema
(Video) from end-October 2016;
- A new classification of revenues on the
basis of five applications: Video, Fixed Data and Government
Services (Core Businesses), and Fixed Broadband and Mobile
Connectivity (Connectivity).
The table below shows quarterly revenues for FY 2015-16
(pro-forma) and FY 2016-17 under the new classifications:
In €
millions
Three months ended Fiscal year
2015-16 Three months ended Fiscal year
2016-17 Sep 2015 Dec 2015
Mar 2016 Jun 2016 Sep
2016 Dec 2016 Mar 2017
Jun 2017 Video 227.6 237.1 236.7
235.7 937.0 226.5 228.9 228.1
224.3 908.0 Fixed Data 51.8 49.2
47.0 45.1 193.0 43.4 41.4 42.1
41.1 168.1 Government Services 47.6
47.3 45.3 40.7 180.8 42.3 43.8
45.2 44.8 176.1 Fixed Broadband 21.3
19.8 17.8 22.2 81.1 24.9
23.7 24.2 23.4 96.2 Mobile Connectivity
17.2 15.1 13.8 13.9 60.0 20.6
17.9 17.2 18.9 74.6 Other revenues
17.8 10.6 15.2 7.2 50.8
27.1 14.5 7.5 6.0 55.0
Total
383.2 379.0 375.7
364.7 1,502.6 384.8
370.2 364.3 358.5
1,477.9
19 See detailed calculation below20 Excluding amount to RSCC
described in the Appendix 3 (€95.2 million).
Reported Revenues
For information purposes, the table below shows reported
revenues for FY 2015-16 and first quarter of FY 2016-17 under the
former classifications.
In € millions
Three months ended Fiscal year 2015-16
Three months ended Sep 2016 Sep 2015
Dec 2015 Mar 2016 Jun
2016 Video Applications 229.4 239.5
239.1 235.6 943.6 224.3 Data Services
58.8 59.3 54.4 57.6 230.0
56.8 Value-Added Services 29.7 25.4 25.3
27.4 107.8 29.4 Government Services
53.0 53.2 49.7 43.9 199.9 47.1
Other revenues 16.7 9.4 14.5 7.2
47.7 27.1
Sub-total 387.7
386.7 383.0 371.6
1,529.0 384.8 Non-recurring revenues -
- - - - --
Total
387.7 386.7 383.0
371.6 1,529.0 384.8
Appendix 3: Alternative performance indicators
In addition to the data published in its accounts, the Group
communicates on three alternative performance indicators which it
deems relevant for measuring its financial performance: EBITDA,
cash capex and Discretionary free cash flow (DFCF). These
indicators are the object of reconciliation with the consolidated
accounts.
EBITDA, EBITDA margin and Net debt / EBITDA ratio
EBITDA reflects the profitability of the Group before
Interest, Tax, Depreciation and Amortization. It is a key indicator
in the Fixed Satellite Services Sector. The table below shows the
calculation of EBITDA based on the consolidated P&L accounts
for FY 2015-16 and 2016-17:
Twelve months ended June 30
(€ millions) 2016 2017 Operating
result 662.0 614.8 +Depreciation and Amortization
500.6 532.9 - Other operating income and expenses 2.0
(14.1)
EBITDA 1,164.6 1,133.6
The EBITDA margin is the ratio of EBITDA to revenues. It is
computed as follows:
Twelve months ended June 30
(€ millions) 2016 2017 EBITDA
1,164.6 1,133.6 Revenues 1,529.0
1,477.9
EBITDA margin (as a % of revenues)
76.2% 76.7%
The Net debt / EBITDA ratio is the ratio of net debt to EBITDA.
It is computed as follows:
Twelve months ended June 30
(€ millions) 2016 2017 EBITDA
1,164.6 1,133.6
Closing net debt21
4,006.8 3,640.7
Net debt / EBITDA
3.4 3.2
21 Net debt includes all bank debt, bonds and all liabilities
from long-term lease agreements and Export Credit Agencies as well
as Forex portion of the cross-currency swap, less cash and cash
equivalents (net of bank overdraft).
Cash Capex
The Group on occasion operates capacity within the framework of
financial leases, or finances all or part of certain satellite
programs under export credit agreements, leading to outflows which
are not reflected in the item “acquisition of satellites and other
tangible or intangible assets”. Cash Capex including these two
elements is published in order to reflect the totality of Capital
Expenditures undertaken in any financial year.
Cash Capex therefore covers the acquisition of satellites and
other tangible or intangible assets as well as payments in
respect of export credit facilities and long term financial leases
on third party capacity.
Cash Capex for 2016-17 is restated from the value of the payment
owed in FY 2015-16 to RSCC in respect of lease of EUTELSAT 36C but
paid effectively in 2016-1722 (payment of €95.2m) which was already
accounted for in FY 2015-16 cash capex. Cash Capex for 2016-17 is
also net of the €132.5m received from ViaSat.
The table below shows the calculation of Cash Capex for FY
2015-16 and 2016-17:
Twelve months ended June 30
(€ millions) 2016 2017 Acquisitions
of satellites, other property and equipment and intangible assets
(390.2) (393.0)
Repayments of ECA loans and long-term
capital leases23
(29.0)
(153.9)24
Payment owed to RSCC in respect of lease of EUTELSAT 36C blocked in
fiscal year 2015-16 due to Yukos legal proceeding (95.2) -
Payment received from ViaSat25
- 132.5
Capex per financial outlook definition
(514.4) (414.4)
Discretionary free cash flow (DFCF)
The Group communicates on Discretionary free cash flow which
reflects its ability to generate cash after the payment of interest
and taxes. DFCF generally and principally serves the dividend
payment and debt reduction.
Discretionary free cash flow is defined as Net cash flow from
operating activities less Cash Capex as well as interest and other
financial costs, net of interest income.
The table below shows the calculation of Discretionary free cash
flow for FY 2015-16 and 2016-17 and its reconciliation with the
cash flow statement:
Twelve months ended June 30
(€ millions) 2016 2017 Net cash
flows from operating activities 895.7 982.9
Acquisitions of satellites, other property and equipment and
intangible assets (390.2) (393.0)
Repayment of Export credit
facilities26
(18.8) (62.9)
Repayment in respect of long-term
leases27
(10.2) (186.2) Interest and other fees paid net of interest
received (134.0) (160.7)
Payment received from ViaSat28
132.5 Payment to RSCC in respect of lease of EUTELSAT 36C included
in FY 2015-16 Discretionary Free-Cash Flow (95.2)
95.2
Discretionary Free-Cash Flow 247.3
407.8
22 In FY 2015-16 the payment was frozen in the context of the
legal action brought against the Russian State by former Yukos
shareholders.23 Included in lines “Repayment of borrowings” and of
“Repayment of finance lease liabilities” of cash-flow statement24
Excluding payment to RSCC mentioned above (€95.2 million)25
Included in the line “Transactions relating to non-controlling
interests” of cash-flow statement26 Included in the line “Repayment
of borrowings” of cash-flow statement27 Included in the line “
Repayment in respect of finance lease liabilities” of cash-flow
statement28 Included in the line “ Transactions relating to
non-controlling interests ” of cash-flow statement
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version on businesswire.com: http://www.businesswire.com/news/home/20170727006594/en/
Eutelsat CommunicationsPress
RelationsVanessa O’Connor, + 33 1 53 98 37
91voconnor@eutelsat.comorMarie-Sophie Ecuer, + 33 1 53 98 37
91mecuer@eutelsat.comorInvestor
RelationsJoanna Darlington, + 33 1 53 98 31
07jdarlington@eutelsat.comorCédric Pugni, + 33 1 53 98 31
54cpugni@eutelsat.com
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