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SES: YTD 2019 Results

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SES S.A. today announced its financial results for the nine months ended 30 September 2019 with financial performance continuing to be in line with SES’ expectations; sequential growth in quarterly revenue and EBITDA and financial outlook unchanged.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191024006026/en/

SES YTD 2019 Results (Photo: Business Wire)

SES YTD 2019 Results (Photo: Business Wire)

Key financial highlights (YTD 2019)

  • Reported revenue of EUR 1,451.9 million, down 3.9% at constant FX(1)
  • Underlying revenue(2) of EUR 1,433.5 million; down 3.6%(1) (Video: -8.1%(1,2) and Networks +5.1%(1,2))
  • EBITDA of EUR 889.6 million, representing a margin of 61.3% (YTD 2018: 63.1%) or 62.3% excluding restructuring charge
  • Net profit attributable to SES’ shareholders of EUR 249.9 million
  • On track to deliver financial outlook (with nearly 95% of FY 2019 expected group revenue now contracted)

 

 

 

 

Change (%)

EUR million

 

YTD 2019

 

YTD 2018

 

Reported

 

Constant FX(1)

Average EUR/USD exchange rate

 

1.1281

 

1.1979

 

 

 

 

Revenue

 

1,451.9

 

1,469.4

 

-1.2%

 

-3.9%

EBITDA

 

889.6

 

927.7

 

-4.1%

 

-6.6%

Operating profit

 

332.6

 

404.3

 

-17.7%

 

-19.0%

Net profit attributable to SES shareholders

 

249.9

 

303.7

 

-17.7%

 

n/a

Earnings per share

 

EUR 0.47

 

EUR 0.59

 

-20.3%

 

n/a

1) Comparative figures are restated at constant FX to neutralise currency variations
2) Excluding periodic and other revenue (disclosed separately) that are not directly related to or would distort the underlying business trends

Steve Collar, CEO, commented: “For the seventh consecutive quarter, our results are in line with our expectations and with the outlook that we have given to the market, reflecting our on-going focus on execution in the core of our business. As expected, we are seeing revenue and EBITDA expansion flowing through in the second half of 2019 with strong control over costs and discretionary spending and the continued rationalisation and simplification of our business and organisation. Execution remains the focus for the rest of the year as we look to close out 2019 with a strong Q4 outturn, much as we did in 2018 and implied in our financial outlook which remains unchanged.

In Video, we completed the combination of our infrastructure and services capabilities; launched a dedicated TV platform in Ethiopia; secured important renewals in our core neighbourhoods; and introduced new products, such as a Satellite/OTT synchronisation capability, managed cloud playout through our partnership with Microsoft Azure and the further development of our in-house orchestration platform SES 360.

Our Networks business continues to grow with recent customer successes including important incremental business on SES-15 in support of our aero service provider customers; important business aviation partnerships with Collins Aerospace and Vista Global; our Signature Maritime Solutions now enabling connectivity in the Mediterranean; and deploying ‘life-changing’ broadband services that will allow our partners to improve connectivity in rural areas across Indonesia and Colombia.

I am excited by the progress that we are making with O3b mPOWER and our vision for a connected, seamless, cloud-scale MEO/GEO network. We are through the critical design phase for O3b mPOWER and have secured the launch of the first seven satellites with SpaceX for 2021. Importantly, we have partnered with Microsoft to extend Azure ExpressRoute services globally across our network, with our combined customers benefiting from the reach and performance of the SES network. All of this will be enabled by an automation and orchestration platform based on Open Network Automation Platform (ONAP) in partnership with Amdocs and leveraging our in-house Adaptive Resource Control (ARC) under development with Kythera to deliver unprecedented levels of flexibility and network efficiency. All of which will make it easy for our customers to get the very best service, delivered when and where they want it, at the right economics and with an unprecedented array of service offerings and enablement.

This was underscored with the recent announcement that, together with Thales Avionics, we have successfully completed seamless and uninterrupted multi-orbit inflight interoperability demonstrations, paving the way for our MEO network to enhance and disrupt aviation services much as it has in cruise.

Finally, the FCC Chairman has reiterated his belief that there will be ‘results to show in the Fall’ from the ongoing proceeding to repurpose C-Band to support the rapid and broad-based roll out of 5G services in the U.S. while protecting the 120 million TV and radio households who rely on the networks that our customers support. The C-Band Alliance is engaged proactively with all stakeholders in the U.S. to ensure that our proposal delivers a fair deal for all.

Key highlights

  • YTD 2019 underlying revenue of EUR 1,433.5 million (excluding periodic and other) was 3.6% lower than YTD 2018 (at constant FX). Additionally, periodic and other revenue was EUR 18.4 million in the nine months ended 30 September 2019.
  • Video underlying revenue of EUR 904.5 million (8.1% lower than YTD 2018) included EUR 300.7 million in Q3 2019 which represented a decrease of 6.4% compared with Q3 2018. The YTD performance was in line with SES’ expectations and driven by lower distribution (-8.2%) and services (-7.7%) revenue, notably from the U.S. wholesale business and SES’ decision to reduce exposure to certain low-margin ‘legacy’ services contracts.
  • Networks underlying revenue grew by 5.1% year-on-year (at constant FX) to EUR 529.0 million driven by strong growth momentum in Mobility (+14.6%) and Government (+4.8%) while Fixed Data was slightly lower (-1.4%). Q3 2019 underlying revenue of EUR 182.2 million represented an increase of 5.2% compared with Q3 2018.
  • YTD 2019 EBITDA of EUR 889.6 million corresponded to an EBITDA margin of 61.3%, including a restructuring charge of EUR 14.2 million. Excluding this charge, EBITDA was 62.3% with group operating expenses slightly lower year-on-year.
  • Net profit attributable to SES shareholders was EUR 249.9 million in the first nine months of 2019.
  • Net debt to EBITDA ratio (as per the rating agency methodology) was 3.47 times, compared with 3.50 times at Q2 2019 and 3.43 times at Q3 2018. The net debt to EBITDA ratio is expected to be at or below 3.30 times by the end of 2019.
  • SES’s fully protected contract backlog at Q3 2019 was EUR 6.6 billion. Nearly 95% of 2019 expected group revenue is now contractually committed and SES remains on track to deliver 2019 group revenue of EUR 1,975 - 2,040 million and EBITDA of EUR 1,220 - 1,265 million (excluding restructuring expenses). The financial outlook assumes a EUR/USD exchange rate of EUR 1 = USD 1.15, nominal launch schedule and satellite health.
  • Expected capital expenditure (representing the net cash absorbed by the group's investing activities excluding acquisitions and financial investments) also remains unchanged for the period 2019 to 2023 with EUR 450 million planned in 2019.
  • On 2 September 2019, SES announced that Andrew Browne, Chief Financial Officer, had decided to step down in October 2019 and that the search for a successor is underway and an announcement will be made in due course.

OPERATIONAL REVIEW

REVENUE BY BUSINESS UNIT

 

 

 

 

Change (%)

EUR million

 

YTD 2019

 

YTD 2018

 

Reported

 

Constant FX

Video

 

906.8

 

977.4

 

-7.2%

 

-8.8%

- Underlying

 

904.5

 

967.5

 

-6.6%

 

-8.1%

- Periodic

 

2.3

 

9.9

 

n/m

 

n/m

Networks

 

544.2

 

491.0

 

+10.8%

 

+5.3%

- Underlying

 

529.0

 

478.1

 

+10.7%

 

+5.1%

- Periodic

 

15.2

 

12.9

 

n/m

 

n/m

Sub-total

 

1,451.0

 

1,468.4

 

-1.2%

 

-3.9%

- Underlying

 

1,433.5

 

1,445.6

 

-0.8%

 

-3.6%

- Periodic

 

17.5

 

22.8

 

n/m

 

n/m

Other(1)

 

0.9

 

1.0

 

n/m

 

n/m

Group Total

 

1,451.9

 

1,469.4

 

-1.2%

 

-3.9%

“Underlying” revenue represents the core business of capacity sales, as well as associated services and equipment. This revenue may be impacted by changes in launch schedule and satellite health status. “Periodic” revenue separates revenues that are not directly related to or would distort the underlying business trends on a quarterly basis. Periodic revenue includes: the outright sale of transponders or transponder equivalents; accelerated revenue from hosted payloads during the course of construction; termination fees; insurance proceeds; certain interim satellite missions and other such items when material.
1) Other includes revenue not directly applicable to Video or Networks

YTD 2019 underlying revenue of EUR 1,433.5 million was 3.6% lower at constant FX, compared with the prior period. Total group revenue included periodic and other revenue of EUR 18.4 million (YTD 2018: EUR 23.8 million).

Q3 2019 revenue of EUR 490.5 million (Q3 2018: EUR 488.0 million) included EUR 7.6 million of periodic and other revenue (Q3 2018: EUR 3.8 million). Q3 2019 underlying revenue of EUR 482.9 million was 2.3% lower (at constant FX) than Q3 2018.

Video: 62% of group revenue (YTD 2018: 67%)

At 30 September 2019, SES was delivering a total of 8,219 TV channels to viewers around the world, representing an increase of 3% (year-on-year). Overall, SES is now distributing 2,867 channels in High Definition (up 3% year-on-year) and 45 commercial Ultra High Definition channels (up 13% year-on-year). 68% of total TV channels are now broadcast in MPEG-4 with an additional 4% in HEVC.

VIDEO REVENUE BY VERTICAL

 

 

 

 

Change (%)

EUR million

 

YTD 2019

 

YTD 2018

 

Reported

 

Constant FX

Video Distribution

 

679.6

 

734.7

 

-7.5%

 

-9.1%

- Underlying

 

677.3

 

724.8

 

-6.5%

 

-8.2%

- Periodic

 

2.3

 

9.9

 

n/m

 

n/m

Video Services

 

227.2

 

242.7

 

-6.4%

 

-7.7%

- Underlying

 

227.2

 

242.7

 

-6.4%

 

-7.7%

- Periodic

 

--

 

--

 

n/m

 

n/m

Video (total)

 

906.8

 

977.4

 

-7.2%

 

-8.8%

- Underlying

 

904.5

 

967.5

 

-6.5%

 

-8.1%

- Periodic

 

2.3

 

9.9

 

n/m

 

n/m

Video Distribution

YTD 2019 underlying revenue was 8.2% lower (constant FX) than the prior year.

As expected, North American revenue decreased, primarily driven by the reduction in wholesale business related to a specific satellite used by a single customer while the ongoing switch-off of Standard Definition TV channels also contributed to the lower (year-on-year) revenue development in this region.

In Europe, the effect of certain long-term renewals secured in late 2018 and the reversal of some short-term capacity contracts that ended during Q3 2018 led to lower (year-on-year) revenue.

While trading conditions remain challenging, SES has made progress in its International business with new customer contracts signed, albeit not yet offsetting the impact of challenges in specific markets.

Q3 2019 underlying revenue of EUR 223.6 million was 7.2% lower (at constant FX) than Q3 2018 but was in line with Q2 2019.

Video Services

Underlying revenue was 7.7% lower (constant FX) in YTD 2019 compared with the prior year.

Lower hardware sales, as the business is shifting towards a software-based model in partnership with leading TV set manufacturers such as Panasonic and Samsung, led to HD+ revenue being lower (year-on-year) while the number of paying subscribers remained stable.

In MX1, the discontinuation of certain low-margin ‘legacy’ services continues to hold back the positive contribution from other, more value-added products and services (such as Sports & Events), leading to lower revenue (year-on-year). As of the beginning of September 2019, MX1 has been combined with SES’ video infrastructure teams to create a single market-facing entity and improved value proposition for customers.

Q3 2019 underlying revenue of EUR 77.1 million was 4.3% lower (at constant FX) than Q3 2018 but was in line with Q2 2019.

Networks: 38% of group revenue (YTD 2018: 33%)

NETWORKS REVENUE BY VERTICAL

 

 

 

 

Change (%)

EUR million

 

YTD 2019

 

YTD 2018

 

Reported

 

Constant FX

Government

 

213.4

 

200.6

 

+6.4%

 

+1.9%

- Underlying

 

211.4

 

192.8

 

+9.6%

 

+4.8%

- Periodic

 

2.0

 

7.8

 

n/m

 

n/m

Fixed Data

 

180.7

 

171.6

 

+5.3%

 

-0.3%

- Underlying

 

173.3

 

166.5

 

+4.1%

 

-1.4%

- Periodic

 

7.4

 

5.1

 

n/m

 

n/m

Mobility

 

150.1

 

118.8

 

+26.4%

 

+19.2%

- Underlying

 

144.3

 

118.8

 

+21.5%

 

+14.6%

- Periodic

 

5.8

 

--

 

n/m

 

n/m

Networks (total)

 

544.2

 

491.0

 

+10.8%

 

+5.3%

- Underlying

 

529.0

 

478.1

 

+10.7%

 

+5.1%

- Periodic

 

15.2

 

12.9

 

n/m

 

n/m

Government

YTD 2019 underlying revenue grew by 4.8% (year-on-year) at constant FX.

Revenue from the U.S. Government continued to grow, supported by MEO and GEO-enabled network solutions with opportunities over the remainder of the year to continue to expand MEO services, enabled by the blanket purchase agreement signed in 2018.

Growth across the Global Government portfolio was driven by the expansion in managed services for government-funded connectivity projects, humanitarian and peacekeeping operations, as well as strong execution in institutional projects.

Q3 2019 underlying revenue of EUR 71.5 million was slightly lower, by 0.7% (at constant FX), than Q3 2018. Compared with Q2 2019, underlying revenue was in line.

Fixed Data

YTD 2019 underlying revenue was 1.4% lower (year-on-year) at constant FX.

Growth was reported in the Americas, and notably Latin America, supported by new and incremental managed services to Telcos and Mobile Networks Operators to deploy 4G networks and rural WiFi projects, and in the Energy segment especially due to ongoing MEO adoption provided to leading service providers in the industry.

Lower revenue from wholesale capacity in EMEA and Asia-Pacific led to overall Fixed Data revenue being slightly lower than the prior period as this is yet to be offset by the timing of customer upgrades and new business in the commercial pipeline.

Q3 2019 underlying revenue of EUR 58.0 million was marginally higher, by 0.3% (at constant FX), than Q3 2018 as well as being higher than Q2 2019.

Mobility

Underlying revenue grew by 14.6% (year-on-year) at constant FX.

Aeronautical once again delivered strong growth driven by the steady increase in the fill rate of SES-15 and SES-14, meeting the strong demand for bandwidth and services from Aero Service Providers supporting North and Latin American airlines. This growth was furthered by the expansion of SES’ Ka-based aero network and the restoration of services on behalf of Intelsat as part of the restoration agreement between the two companies that was activated during Q2 2019.

In Maritime, the cruise segment continued to lead growth with the expansion of agreements with existing cruise customers and contributions from new cruise operators signed. As a result, SES is now supporting four of the top five global cruise operators, representing significant vessel expansion potential.

Q3 2019 underlying revenue of EUR 52.7 million was 21.7% higher (at constant FX) than Q3 2018 and showed strong sequential growth from Q2 2019.

Future satellite capacity

COMMITTED LAUNCH SCHEDULE

Satellite

 

Region

 

Application

 

Launch Date

O3b (satellites 17-20)

 

Global

 

Fixed Data, Mobility, Government

 

Launched (4 April 2019)

SES-17

 

Americas

 

Fixed Data, Mobility, Government

 

H1 2021

O3b mPOWER (satellites 1-7)

 

Global

 

Fixed Data, Mobility, Government

 

H1 2021

FINANCIAL REVIEW

REVENUE, OPERATING EXPENSES AND EBITDA

EUR million

 

YTD 2019

 

YTD 2018

 

Change

 

Change (%)

Revenue

 

1,451.9

 

1,469.4

 

(17.5)

 

-1.2%

Revenue (constant FX)

 

1,451.9

 

1,511.4

 

(59.5)

 

-3.9%

 

 

 

 

 

 

 

 

 

Operating expenses

 

(562.3)

 

(541.7)

 

(20.6)

 

-3.8%

Operating expenses (constant FX)

 

(562.3)

 

(559.2)

 

(3.1)

 

-0.6%

 

 

 

 

 

 

 

 

 

EBITDA

 

889.6

 

927.7

 

(38.1)

 

-4.1%

EBITDA (constant FX)

 

889.6

 

952.2

 

(62.6)

 

-6.6%

Reported revenue was EUR 17.5 million below the prior period and included the benefit of the stronger U.S. Dollar for the nine months ended 2019 as compared with the same period in 2018. At constant FX, revenue decreased by EUR 59.5 million (or 3.9%) with lower Video revenue largely offset by strong growth in Networks.

Operating expenses were EUR 20.6 million higher as reported (or EUR 3.1 million higher at constant FX) and included a restructuring charge of EUR 14.2 million as part of the company’s ongoing optimisation initiatives (YTD 2018: EUR 9.7 million). Excluding the restructuring charge, and at constant FX, operating expenses were lower (EUR 1.4 million) year-on-year.

Group EBITDA represented an EBITDA margin of 61.3% (YTD 2018: 63.1%), or 62.3% excluding the restructuring charge noted above.

DEPRECIATION, AMORTISATION AND OPERATING PROFIT

EUR million

 

YTD 2019

 

YTD 2018

 

Change

 

Change (%)

Depreciation and impairment expense

 

(491.1)

 

(463.7)

 

(27.4)

 

-5.9%

Amortisation expense

 

(65.9)

 

(59.7)

 

(6.2)

 

-10.3%

Depreciation, impairment and amortisation expense

 

(557.0)

 

(523.4)

 

(33.6)

 

-6.4%

Depreciation, impairment and amortisation expense (constant FX)

 

(557.0)

 

(541.9)

 

(15.1)

 

-2.8%

 

 

 

 

 

 

 

 

 

Operating profit

 

332.6

 

404.3

 

(71.7)

 

-17.7%

Operating profit (constant FX)

 

332.6

 

410.3

 

(77.7)

 

-19.0%

Reported depreciation, impairment and amortisation expense increased by EUR 15.1 million compared with the prior period (at constant FX) primarily due to the entry into service of new satellites since 30 September 2018.

Operating profit represented an operating profit margin of 22.9% (YTD 2018: 27.5%), or 23.9% excluding the restructuring charge as noted above.

PROFIT ATTRIBUTABLE TO SES SHAREHOLDERS

EUR million

 

YTD 2019

 

YTD 2018

 

Change

 

Change (%)

Net interest expense and other

 

(132.5)

 

(134.7)

 

+2.2

 

+1.6%

Capitalised interest

 

7.1

 

23.8

 

(16.7)

 

-70.2%

Net foreign exchange gains / (loss)

 

11.0

 

(0.6)

 

+11.6

 

n/m

Net financing costs

 

(114.4)

 

(111.5)

 

(2.9)

 

-2.6%

Profit before tax

 

218.2

 

292.8

 

(74.6)

 

-25.5%

 

 

 

 

 

 

 

 

 

Income tax (expense) / benefit

 

16.0

 

27.3

 

(11.3)

 

-41.4%

Profit after tax

 

234.2

 

320.1

 

(85.9)

 

-26.8%

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

15.7

 

(16.4)

 

+32.1

 

n/m

Profit attributable to SES shareholders

 

249.9

 

303.7

 

(53.8)

 

-17.7%

 

 

 

 

 

 

 

 

 

Coupon on hybrid (perpetual) bond, net of tax

 

(36.5)

 

(36.0)

 

(0.5)

 

-1.4%

Adjusted profit attributable to SES shareholders

 

213.4

 

267.7

 

(54.3)

 

-20.3%

Basic earnings per Class A share (in EUR)

 

EUR 0.47

 

EUR 0.59

 

(0.12)

 

-20.3%

Net financing costs were EUR 2.9 million higher than the prior period with lower interest expenses and favourable foreign exchange movements more than offset by lower capitalised interest, as some recent space and ground investments are now in service and ramping up.

The year-on-year comparison of income tax expense and non-controlling interests is affected by the one-off impact associated with the recognition of a deferred tax asset in 2018 and its corresponding impact on non-controlling interests. The YTD 2019 income tax included the recognition of certain investment tax credits.

Net profit attributable to SES shareholders of EUR 249.9 million represented basic earnings per share of EUR 0.47 after deducting the assumed coupon (net of tax) for the group’s hybrid (perpetual) bonds.

At 30 September 2019, SES’ net debt to EBITDA ratio (per the rating agency methodology which treats SES’ EUR 1.3 billion of hybrid bonds as 50% debt and 50% equity) was 3.47 times. In line with the previous year’s trend, the net debt to EBITDA ratio expected to be at or below 3.3 times by the end of 2019.

CONSOLIDATED INCOME STATEMENT

FOR THE NINE MONTHS ENDED 30 SEPTEMBER

EUR million

 

YTD 2019

 

YTD 2018

Average EUR/USD exchange rate

 

1.1281

 

1.1979

 

 

 

 

 

Revenue

 

1,451.9

 

1,469.4

 

 

 

 

 

Operating expenses(1)

 

(562.3)

 

(541.7)

EBITDA(2)

 

889.6

 

927.7

 

 

 

 

 

Depreciation and impairment expense

 

(491.1)

 

(463.7)

Amortisation expense

 

(65.9)

 

(59.7)

Operating profit

 

332.6

 

404.3

 

 

 

 

 

Net financing costs

 

(114.4)

 

(111.5)

Profit before tax

 

218.2

 

292.8

 

 

 

 

 

Income tax benefit/(expense)

 

16.0

 

27.3

Profit after tax

 

234.2

 

320.1

 

 

 

 

 

Non-controlling interests

 

15.7

 

(16.4)

Profit attributable to owners of the parent

 

249.9

 

303.7

 

 

 

 

 

Basic earnings per share (in EUR)(3)

 

 

 

 

Class A shares

 

0.47

 

0.59

Class B shares

 

0.19

 

0.24

1) Includes EUR 14.2 million of restructuring charges in YTD 2019 and EUR 9.7 million in YTD 2018
2) Earnings before interest, tax, depreciation, amortisation and share of associates’ result (net of tax)
3) Earnings per share is calculated as profit attributable to owners of the parent divided by the weighted average number of shares outstanding during the year, as adjusted to reflect the economic rights of each class of share. For the purposes of the EPS calculation only, the net profit for the year attributable to ordinary shareholders has been adjusted to include the assumed coupon, net of tax, on the perpetual bonds. Fully diluted earnings per share are not significantly different from basic earnings per share

Supplementary information:

QUARTERLY REVENUE BY VERTICAL

 

 

Revenue (reported), EUR million

 

Change (year-on-year) at constant FX, %

 

 

Q1 2019

 

Q2 2019

 

Q3 2019

 

YTD 2019

 

Q1 2019

 

Q2 2019

 

Q3 2019

 

YTD 2019

Video Distribution

 

229.2

 

225.3

 

225.1

 

679.6

 

-8.9%

 

-11.2%

 

-7.1%

 

-9.1%

- Underlying

 

228.4

 

225.3

 

223.6

 

677.3

 

-8.1%

 

-9.2%

 

-7.2%

 

-8.2%

- Periodic

 

0.8

 

--

 

1.5

 

2.3

 

n/m

 

n/m

 

n/m

 

n/m

Video Services

 

74.9

 

75.2

 

77.1

 

227.2

 

-4.5%

 

-13.8%

 

-4.3%

 

-7.7%

- Underlying

 

74.9

 

75.2

 

77.1

 

227.2

 

-4.5%

 

-13.8%

 

-4.3%

 

-7.7%

- Periodic

 

--

 

--

 

--

 

--

 

n/m

 

n/m

 

n/m

 

n/m

Video (total)

 

304.1

 

300.5

 

302.2

 

906.8

 

-7.8%

 

-11.9%

 

-6.4%

 

-8.8%

- Underlying

 

303.3

 

300.5

 

300.7

 

904.5

 

-7.3%

 

-10.4%

 

-6.4%

 

-8.1%

- Periodic

 

0.8

 

--

 

1.5

 

2.3

 

n/m

 

n/m

 

n/m

 

n/m

Government

 

68.5

 

73.4

 

71.5

 

213.4

 

+9.6%

 

-2.0%

 

-0.7%

 

+1.9%

- Underlying

 

68.5

 

71.4

 

71.5

 

211.4

 

+9.6%

 

+6.3%

 

-0.7%

 

+4.8%

- Periodic

 

--

 

2.0

 

--

 

2.0

 

n/m

 

n/m

 

n/m

 

n/m

Fixed Data

 

58.7

 

58.2

 

63.8

 

180.7

 

-1.3%

 

-5.5%

 

+6.2%

 

-0.3%

- Underlying

 

58.7

 

56.6

 

58.0

 

173.3

 

-1.3%

 

-3.2%

 

+0.3%

 

-1.4%

- Periodic

 

--

 

1.6

 

5.8

 

7.4

 

n/m

 

n/m

 

n/m

 

n/m

Mobility

 

49.2

 

48.2

 

52.7

 

150.1

 

+23.2%

 

+12.9%

 

+21.7%

 

+19.2%

- Underlying

 

43.4

 

48.2

 

52.7

 

144.3

 

+8.7%

 

+12.9%

 

+21.7%

 

+14.6%

- Periodic

 

5.8

 

--

 

--

 

5.8

 

n/m

 

n/m

 

n/m

 

n/m

Networks (total)

 

176.4

 

179.8

 

188.0

 

544.2

 

+8.9%

 

+0.3%

 

+7.2%

 

+5.3%

- Underlying

 

170.6

 

176.2

 

182.2

 

529.0

 

+5.4%

 

+4.7%

 

+5.2%

 

+5.1%

- Periodic

 

5.8

 

3.6

 

5.8

 

15.2

 

n/m

 

n/m

 

n/m

 

n/m

Sub-total

 

480.5

 

480.3

 

490.2

 

1,451.0

 

-2.3%

 

-7.7%

 

-1.6%

 

-3.9%

- Underlying

 

473.9

 

476.7

 

482.9

 

1,433.5

 

-3.1%

 

-5.4%

 

-2.3%

 

-3.6%

- Periodic

 

6.6

 

3.6

 

7.3

 

17.5

 

n/m

 

n/m

 

n/m

 

n/m

Other(1)

 

0.1

 

0.5

 

0.3

 

0.9

 

n/m

 

n/m

 

n/m

 

n/m

Group Total

 

480.6

 

480.8

 

490.5

 

1,451.9

 

-2.3%

 

-7.7%

 

-1.6%

 

-3.9%

“Underlying” revenue represents the core business of capacity sales, as well as associated services and equipment. This revenue may be impacted by changes in launch schedule and satellite health status. “Periodic” revenue separates revenues that are not directly related to or would distort the underlying business trends on a quarterly basis. Periodic revenue includes: the outright sale of capacity; accelerated revenue from hosted payloads during the course of construction; termination fees; insurance proceeds; certain interim satellite missions and other such items when material.
1) Other includes revenue not directly applicable to Video or Networks

QUARTERLY INCOME STATEMENT (AS REPORTED)

EUR million

 

Q3 2018

 

Q4 2018

 

Q1 2019

 

Q2 2019

 

Q3 2019

Average EUR/USD exchange rate

 

1.1682

 

1.1418

 

1.1451

 

1.1201

 

1.1189

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

488.0

 

540.9

 

480.6

 

480.8

 

490.5

Operating expenses

 

(181.4)

 

(213.1)

 

(190.5)

 

(186.4)

 

(185.4)

EBITDA

 

306.6

 

327.8

 

290.1

 

294.4

 

305.1

EBITDA margin

 

62.8%

 

60.6%

 

60.4%

 

61.2%

 

62.2%

 

 

 

 

 

 

 

 

 

 

 

Depreciation and impairment expense

 

(160.2)

 

(255.3)

 

(156.4)

 

(166.6)

 

(168.1)

Amortisation and impairment expense

 

(19.8)

 

(85.7)

 

(20.5)

 

(24.8)

 

(20.6)

Operating profit

 

126.6

 

(13.2)

 

113.2

 

103.0

 

116.4

Operating profit margin

 

26.0%

 

-2.5%

 

23.6%

 

21.4%

 

23.7%

 

 

 

 

 

 

 

 

 

 

 

Net financing costs

 

(36.3)

 

(34.8)

 

(37.8)

 

(43.6)

 

(33.0)

Profit before tax

 

90.3

 

(48.0)

 

75.4

 

59.4

 

83.4

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit/(expense)

 

(13.6)

 

14.6

 

(7.2)

 

29.6

 

(6.4)

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

(0.7)

 

22.1

 

4.0

 

8.0

 

3.7

Profit attributable to owners of the parent

 

76.0

 

(11.3)

 

72.2

 

97.0

 

80.7

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (in EUR)(1)

 

 

 

 

 

 

 

 

 

 

Class A shares

 

0.14

 

-0.05

 

0.13

 

0.19

 

0.15

Class B shares

 

0.06

 

-0.02

 

0.05

 

0.07

 

0.07

1) Earnings per share is calculated as profit attributable to owners of the parent divided by the weighted average number of shares outstanding during the year, as adjusted to reflect the economic rights of each class of share. For the purposes of the EPS calculation only, the net profit for the year attributable to ordinary shareholders has been adjusted to include the coupon, net of tax, on the perpetual bonds. Fully diluted earnings per share are not significantly different from basic earnings per share

QUARTERLY OPERATING PROFIT (AT CONSTANT FX)

EUR million

 

Q3 2018

 

Q4 2018

 

Q1 2019

 

Q2 2019

 

Q3 2019

Average U.S. dollar exchange rate

 

1.1189

 

1.1189

 

1.1189

 

1.1189

 

1.1189

Revenue

 

498.4

 

546.2

 

485.9

 

480.9

 

490.5

Operating expenses

 

(184.5)

 

(215.8)

 

(193.2)

 

(186.5)

 

(185.4)

EBITDA

 

313.9

 

330.4

 

292.7

 

294.4

 

305.1

EBITDA margin

 

63.0%

 

60.5%

 

60.2%

 

61.2%

 

62.2%

 

 

 

 

 

 

 

 

 

 

 

Depreciation and impairment expense

 

(165.0)

 

(258.8)

 

(158.6)

 

(166.7)

 

(168.1)

Amortisation and impairment expense

 

(20.0)

 

(87.0)

 

(20.6)

 

(24.8)

 

(20.6)

Operating profit

 

128.9

 

(15.4)

 

113.5

 

102.9

 

116.4

Operating profit margin

 

25.9%

 

-2.8%

 

23.4%

 

21.4%

 

23.7%

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Presentation of Results:
A presentation of the results for investors and analysts will be hosted at 9.30 CEST on 25 October 2019 and will be broadcast via webcast and conference call. The details for the conference call and webcast are as follows:

Luxembourg +352 27 86 05 15 / 800 24782
France +33 (0) 176700794 / 0805 103028
Germany +49 (0) 69 24 43 73 51 / 0800 7234866
U.K. +44 (0) 207 192 8000 / 0800 3767922
U.S.A. +1 631 510 7495 / 1 866 966 1396

Confirmation code: 6652274

Webcast registration: https://edge.media-server.com/mmc/go/SES_19Q3

The presentation will be available for download from the Investors section of the SES website (www.ses.com), and a replay will be available for two weeks from the Investors section of the SES website.

About SES

SES is the world’s leading satellite operator with over 70 satellites in two different orbits, Geostationary Orbit (GEO) and Medium Earth Orbit (MEO). It provides a diverse range of customers with global video distribution and data connectivity services through two business units: SES Video and SES Networks. SES Video reaches over 355 million TV homes, through Direct-to-Home (DTH) platforms and cable, terrestrial, and IPTV networks globally. SES Video delivers a full suite of innovative end-to-end value-added services for both linear and digital distribution, and includes the ASTRA satellite system, which has the largest DTH television reach in Europe. SES Networks provides global managed data services, connecting people in a variety of sectors including telecommunications, maritime, aeronautical, and energy, as well as governments and institutions across the world. The SES Networks portfolio includes GovSat, a 50/50 public-private partnership between SES and the Luxembourg government, and O3b, the only non-geostationary system delivering fibre-like broadband services today. Further information is available at: www.ses.com

Disclaimer

This presentation does not, in any jurisdiction, and in particular not in the U.S., constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, or any investment advice in connection with, any securities of SES nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.

No representation or warranty, express or implied, is or will be made by SES, its directors, officers or advisors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation, and any reliance you place on them will be at your sole risk. Without prejudice to the foregoing, none of SES or its directors, officers or advisors accept any liability whatsoever for any loss however arising, directly or indirectly, from use of this presentation or its contents or otherwise arising in connection therewith.

This presentation includes “forward-looking statements”. All statements other than statements of historical fact included in this presentation, including, without limitation, those regarding SES’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to SES products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of SES to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding SES and its subsidiaries and affiliates, present and future business strategies and the environment in which SES will operate in the future and such assumptions may or may not prove to be correct. These forward-looking statements speak only as at the date of this presentation. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. SES and its directors, officers and advisors do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact information

Richard Whiteing
Investor Relations
+352 710 725 261
Richard.Whiteing@ses.com

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