- Q1 revenues of €349 million, down
9.3% reported and by 6.7% like-for-like
- Well-oriented Backlog, Fill Rate and
HD penetration metrics
- US Government renewals at c.95% in
value
- Al Yah 3 delay impacting Fixed
Broadband: FY 2017-18 revenues therefore adjusted -1 to - 2%
(versus ‘broadly stable’)
- All other objectives confirmed for
FY 2017-18 and coming years
Regulatory News:
Eutelsat Communications (Paris:ETL) (ISIN: FR0010221234 -
Euronext Paris: ETL) today reported revenues for the First Quarter
ended 30 September 2017.
Note: Since its First Half 206-17 results on 9 February 2017,
Eutelsat publishes revenues on the basis of five applications:
Video, Fixed Data and Government Services (Core Businesses), Fixed
Broadband and Mobile Connectivity (Connectivity).
Previous reported
applications
Proforma: New applications Variation In
€ millions
Q1 2016-17
In € millions
Q1 2016-171
Q1 2017-18 Vs. reported revenues
Like-for-like change2
Video Applications 224.3 Video Applications
226.5
223.3 N/A -0.8% Data Services
56.8 Fixed Data 43.4
37.1 -11.7%
Value-Added Services 29.4 Government Services
42.3
41.1 +1.1% Government Services 47.1
Fixed Broadband 24.9
22.3 -9.7% Other
revenues 27.1 Mobile Connectivity 14.5
18.6 +33.3%
Other revenues3
27.1
6.8 -74.8%
Total
384.8 Total 378.7
349.1 -9.3% -6.7% EUR/USD
exchange rate 1.11
1.16
Rodolphe Belmer, Chief Executive Officer, commented: “First
Quarter revenues were in line with our expectations. Our key
operational metrics were well oriented with a further rise in HD
penetration, a stabilisation of the Backlog and an improved Fill
Rate on a quarter-on-quarter basis. The Fall renewal campaign with
the US Government yielded a favourable outturn, at some 95% in
value while the outcomes of Video renewals during the quarter were
positive, notably with Polsat on HOTBIRD. Elsewhere we took further
measures to optimise Video distribution with the absorption of
Noorsat in the MENA region.
“For the remainder of the year, revenues in our Core Businesses
are on track, and Mobility will further benefit from the entry into
service of EUTELSAT 172B in November. However, the late
availability of the payload leased on the Al Yah 3 satellite,
representing the majority of the capacity dedicated to Konnect
Africa, will push out revenues in Fixed Broadband. In recognition
of this delay, revenue expectations for FY 2017-18 are mechanically
adjusted from ‘broadly stable’ to between -1 and -2%. This
adjustment will not affect our ability to attain our other
objectives, in particular EBITDA margin and discretionary free
cashflow, which are all re-affirmed for the current and future
years.”
1 Proforma revenues reflecting disposals of Wins/DHI and DSAT
Cinema. For more details, please refer to the appendices.2 At
constant currency and perimeter.3 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.
KEY EVENTS
The key events of the First Quarter were as follows:
- Q1 revenues down 1.0% at constant
currency and perimeter and excluding ‘Other’ revenues;
- Well-oriented operational metrics, with
a further rise in HD penetration as well as a stabilisation of the
Backlog and an improved Fill Rate on a quarter-on-quarter
basis;
- Favourable outcome of the US Government
Fall renewals with a rate of almost 95% in value;
- Positive outcome of Video contract
renewals, notably with Cyfrowy Polsat on HOTBIRD;
- Absorption of Noorsat to optimise Video
distribution in the MENA region;
- Delayed availability of Al Yah 3
capacity impacting Konnect Africa ramp-up. All other verticals on
track.
FIRST QUARTER REVENUES4
First Quarter revenues stood at €349.1 million, down 6.7%
at constant currency and perimeter. On a reported basis, revenues
were down 9.3% reflecting a €6 million negative perimeter effect
(disposal5 of Wins/DHI and DSAT Cinema) and a €5 million negative
currency effect.
Excluding ‘Other’ revenues, the underlying applications were
down 1.0% like-for-like.
Quarter-on-quarter, revenues were down 2.6% on a reported basis
and by -0.2% on a like-for-like basis.
Unless otherwise stated, all variations indicated below are on a
like-for-like basis.
Core businesses
Video Applications (65% of revenues)
First Quarter revenues for Video Applications amounted to
€223.3 million, down 0.8% year-on-year. Revenues from Broadcast
were up 0.5% year-on-year excluding the carry-forward impact of the
termination of the TV d’Orange contract last year, with growth
coming from Russia (at the 36° East and 56° East orbital positions)
and MENA (at the 7/8° West and 7° East orbital positions).
Professional Video revenues continued to reflect ongoing tough
conditions.
Revenues were up by 0.7% quarter-on-quarter.
At 30 September 2017, the total number of channels broadcast by
Eutelsat satellites stood at 6,755, up 6.6% year-on-year. The
number of HD channels stood at 1,210 versus 940 a year earlier, up
by 28.7% and represented 17.9% of channels compared to 14.8% a year
earlier.
On the commercial front a major contract was renewed with
Cyfrowy Polsat at the HOTBIRD position as well as with the
distributor, Globecast. Elsewhere, the Group took steps to
streamline Video distribution in MENA with the absorption of
Noorsat, its largest reseller in the region.
Fixed Data (11% of revenues)
First Quarter revenues for Fixed Data stood at €37.1
million, down 11.7% year-on-year. They continued to reflect ongoing
pricing pressure in all geographies.
Quarter-on-quarter revenues were down by 4.7%.
Government Services (12% of revenues)
In the First Quarter, Government Services revenues stood
at €41.1 million, up 1.1% year-on-year, reflecting the carry-over
effect of the solid commercial performance in FY 2016-17.
Revenues were down by 2.0% quarter-on-quarter, reflecting the
absence of the positive one-off recorded in the fourth quarter of
2016-17.
The latest round of contract renewals with the US Government
(Fall 2017) resulted in an estimated renewal rate of almost 95% in
value, with virtually stable volumes and a slight decline in
price.
4 The share of each application as a percentage of total
revenues is calculated excluding “other revenues”. Unless otherwise
stated, all growth indicators are made in comparison with First
Quarter ended 30 September 2016.5 Wins/DHI (Mobile Connectivity)
deconsolidated from end-August 2016 and DSAT Cinema (Video) from
end-October 2016.
Connectivity
Fixed Broadband (7% of revenues)
Fixed Broadband revenues stood at €22.3 million, down
9.7% year-on-year, reflecting the absence of a positive one-off
booked last year related to the phasing of payments by a specific
customer. Underlying trends in European Broadband remained
resilient, with a decline in subscriber numbers broadly offset by a
well-oriented ARPU.
Quarter-on-quarter, revenues were down by 3.5%.
The launch and entry into service of Yahsat’s Al Yah 3
satellite, on which Eutelsat will lease the majority of the
capacity dedicated to Konnect Africa, is now definitively delayed,
with the start of commercial services on this satellite now
expected in June 2018 at the earliest. The attendant postponement
of related commercial initiatives, is also affecting revenue
generation on the Al Yah 2 satellite. In consequence, the vast
majority of revenue expectations from Konnect Africa are pushed out
into FY 2018-19.
Mobile Connectivity (5% of revenues)
Mobile Connectivity revenues stood at €18.6 million, up
33.3% year-on-year, reflecting the effect of the Taqnia contract
signed last year as well as continued growth on wide-beam capacity
with customers including Gogo, Hunter and Panasonic.
Revenues were up by 5.1% quarter-on-quarter.
Revenues will benefit from the entry into service of EUTELSAT
172B in November, on which the incremental HTS payload for
in-flight connectivity is partly pre-sold.
Other Revenues
Other revenues amounted to €6.8 million in the First
Quarter versus €27.1 million a year earlier and €6.0 million in the
Fourth Quarter last year.
In Q1 2016-17, they included fees in respect of technical and
engineering services provided to a third party operator,
termination fees related to the rationalisation of the distribution
at HOTBIRD as well as revenues related to the agreements with SES
at 28.5° East, which ended on 31 December 2016.
OPERATIONAL AND UTILISED
TRANSPONDERS
The number of operational 36 MHz-equivalent transponders stood
at 1,374 at 30 September 2017, up by 47 units compared with
end-September 2016, reflecting principally the entry into service
of EUTELSAT 117 West B in January 2017. As a result, the fill rate
stood at 68.4% at end-September 2017 versus 71.5% a year earlier,
reflecting mainly the impact of this new capacity.
An incremental nine transponders have been sold since end-June
2017.
30
September
2016
30 June
2017
30 September
2017
Number of operational 36 MHz-equivalent
transponders 6
1,327 1,372
1,374
Number of utilised 36 MHz-equivalent
transponders7
948 931
940 Fill rate 71.5% 67.9%
68.4%
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).
6 Number of 36 MHz-equivalent transponders on satellites in
stable orbit, back-up capacity excluded.7 Number of 36
MHz-equivalent transponders utilised on satellites in stable
orbit.
BACKLOG
The backlog8 stood at €5.2 billion at 30 September 2017, versus
€5.4 billion at end September 2016, and €5.2 billion at end-June
2017. The sequential stabilization in the Backlog reflects video
renewals during the quarter which offset natural consumption.
The backlog was equivalent to 3.5 times 2016-17 revenues, with
Video representing 86%.
30
September
2016
30 June
2017
30 September 2017 Value of contracts (in billions of
euros) 5.4 5.2
5.2 In years of annual
revenues based on last fiscal year 3.6 3.5
3.5 Share of
Video Applications 85% 85%
86%
OUTLOOK
Based on the performance of the First Quarter, revenues from the
Core businesses and Mobile Connectivity are on track to meet full
year targets. On the other hand, Fixed Broadband revenues will be
below expectations mainly due to the delayed availability of the Al
Yah 3 satellite.
In consequence, total revenues for FY 2017-18 are now expected
at between -1 and -2% (at constant currency and perimeter9), versus
‘broadly stable’ previously.
This adjustment has no impact on the other elements of the
financial outlook which are all confirmed for the current and
coming years:
- Revenues (at constant currency
and perimeter) are expected to 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%;
- Cash Capex will be maintained at
an average of €420 million10 per annum for the period July 2017 to
June 2020;
- Discretionary Free Cash Flow11
is expected to deliver mid-single digit CAGR in the period July
201712 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 aims at a net debt / EBITDA ratio below
3.0x;
- It also retains its commitment to
serving a stable to progressive dividend.
This outlook is based on the nominal deployment plan
hereunder.
FLEET DEVELOPMENTS
Nominal launch programme
The upcoming launch schedule is indicated below.
8 The backlog represents future revenues from capacity lease
agreements and can include contracts for satellites under
procurement.9 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)10 Including capital expenditure and payments
under existing export credit facilities and long-term lease
agreements on third party capacity.11 Net cash-flow from operating
activities – Cash Capex - Interest and Other fees paid net of
interest received12 Discretionary Free-Cash-Flow of €407.8 million
in FY 2016-17.
Satellite1
Orbital
position
Estimated launch(calendar year)
Main
applications
Main geographic coverage Physical
transponders
36 MHz-equivalent transponders / Spotbeams
Of which expansion
36 MHz-equivalent transponders
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, MENA 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.
The launch of the Al Yah 3 satellite, on which Eutelsat will
lease capacity for its Konnect Africa project, is now expected in
the first quarter of 2018.
Changes in the fleet
There have been no changes in the fleet since 30 June 2017.
GOVERNANCE
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; Agnès Audier will replace Dominique D’Hinnin as
permanent representative of FSP.
- Appointment of Esther Gaide,
Paul-François Fournier and Didier Leroy as Board Members;
- Compensation of corporate officers and
compensation policy;
- Several financial resolutions.
Subject to the approval of the Annual General Meeting, the Board
of Directors will comprise 12 members of which eight independent
(Dominique D’Hinnin, FSP (which will be represented by Agnès
Audier), Esther Gaide, Didier Leroy, Lord Birt, Ana Garcia Fau,
Ross Mc Innes, Carole Piwnica).
RECENT EVENTS
Acquisition of Noorsat
Eutelsat acquired 100% of NOORSAT, one of the leading satellite
service providers in the Middle East, from Bahrain’s Orbit Holding
Group for a consideration of US$75 million, debt- and cash-free.
The acquisition will add upwards of US$15 million to Eutelsat’s
consolidated revenues on an annualised basis after the elimination
of the capacity leased by NOORSAT from Eutelsat. Its slightly
dilutive impact on Eutelsat’s EBITDA margin will be absorbed within
existing margin objectives.
******
First Quarter 2016-17 revenues conference call
A conference call will be held on Thursday, 26 October
2017 at 18.30 CET / 17.30 GMT / 12:30 EST
To connect to the call, please use the following numbers:
- France: +33 (0) 1 76 77 22 74
- UK: +44 (0) 330 336 9105
- United States: +1 719 325
2202Access code: 8203389#
Instant replay will be available from 26 October, 22.00 CET to 2
November, 22.00 CET on the following numbers:
- France: +33 (0) 1 70 48 00 94
- UK: + 44 (0) 207 984 7568
- United States: + 1 719 457
0820Access code: 8203389 #
Financial calendar
Note: The financial calendar is provided for information
purposes only. It is subject to change and will be regularly
updated.
- 8 November 2017: Annual General
Shareholders’ Meeting
- 16 February 2018: First Half 2017-18
results
APPENDICES
Quarterly revenues by application
Proforma revenues
As a reminder,
- Proforma revenues were published with
the H1 2016-17 revenues release on 9 February 2017, reflecting
notably 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).
- Wins / DHI (Mobile Connectivity) was
deconsolidated from end-August 2016 and DSAT Cinema (Video) from
end-October 2016.
The table below shows quarterly proforma revenues for FY 2016-17
under the new classifications and excluding revenues from Wins /
DHI and DSAT Cinema:
In € millions
Q1 2016-17
Q2 2016-17 Q3 2016-17 Q4
2016-17 FY 2016-17 Q1 2017-18 Video
226.5 228.7 228.1 224.3 907.7
223.3 Fixed Data 43.4 41.4 42.1
41.1 168.1 37.1 Government Services 42.3
43.8 45.2 44.8 176.1 41.1 Fixed
Broadband 24.9 23.7 24.2 23.4
96.2 22.3 Mobile Connectivity 14.5 17.9
17.2 18.9 68.5 18.6 Other revenues 27.1
14.5 7.5 6.0 55.0 6.8
Total 378.7 370.0
364.3 358.5 1,471.6
349.1
Reported Revenues for FY 2016-17
Under the previous classification (Q1 only):
In € millions
Q1 2016-17 Video
Applications 224.3 Data Services 56.8 Value-Added
Services 29.4 Government Services 47.1 Other revenues
27.1
Total 384.8
Under the new classifications:
In € millions
Q1 2016-17 Q2
2016-17 Q3 2016-17 Q4 2016-17
FY 2016-17 Video 226.5 228.9
228.1 224.3 908.0 Fixed Data 43.4 41.4
42.1 41.1 168.1 Government Services
42.3 43.8 45.2 44.8 176.1 Fixed
Broadband 24.9 23.7 24.2 23.4
96.2 Mobile Connectivity 20.6 17.9 17.2
18.9 74.6 Other revenues 27.1 14.5 7.5
6.0 55.0
Total 384.8
370.2 364.3 358.5
1,477.9
About Eutelsat Communications:
Founded in 1977, Eutelsat Communications
is one of the world's leading satellite operators. With a global
fleet of satellites and associated ground infrastructure, Eutelsat
enables clients across Video, Data, Government, Fixed and Mobile
Broadband markets to communicate effectively to their customers,
irrespective of their location. Over 6,600 television channels
operated by leading media groups are broadcast by Eutelsat to one
billion viewers equipped for DTH reception or connected to
terrestrial networks. Headquartered in Paris, with offices and
teleports around the globe, Eutelsat assembles 1,000 men and women
from 32 countries who are dedicated to delivering the highest
quality of service. Eutelsat Communications is listed on the
Euronext Paris Stock Exchange (ticker: ETL). For more about
Eutelsat go to 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 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171026006105/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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