- Full Year revenue objective upgraded, and all other
objectives confirmed
- Nine months operating vertical revenues down 3.5%1
year-on-year
- Third Quarter Operating Verticals revenues down 6.1%1
year-on-year, in line with expectations
- Backlog of €4.5bn up 6% and representing 3.5 years of
revenues
- Favourable outturn of Spring 2021 renewal campaign with
USG
- Progress on our Fixed Broadband strategy
Regulatory News:
Eutelsat Communications (ISIN: FR0010221234 - Euronext Paris:
ETL) reports revenues for the Third Quarter and Nine Months ended
31 March 2021.
In € millions
Q3 2019-20
Q3 2020-21
Change
Reported
Like-for-like2
Broadcast
198.8
182.0
-8.5%
-6.8%
Data & Professional Video
44.8
39.5
-11.9%
-6.7%
Government Services
40.0
36.7
-8.1%
-0.3%
Fixed Broadband
18.8
20.5
+9.1%
+1.9%
Mobile Connectivity
20.8
15.7
-24.3%
-17.2%
Total Operating
Verticals
323.1
294.4
-8.9%
-6.1%
Other Revenues3
(1.1)
6.9
Na
Na
Total
322.0
301.3
-6.4%
-5.9%
EUR/USD exchange rate
1.10
1.22
Rodolphe Belmer, Chief Executive Officer of Eutelsat
Communications, said: “This Quarter has seen some important
operational milestones, notably the outcome of the Spring renewal
campaign with the US administration well above historical average,
while the increase in our backlog reflects our important recent
commercial wins. Most notably, we are now seeing real momentum in
our Fixed Broadband ramp-up with EUTELSAT KONNECT now at full
coverage, enabling us to make tangible progress in Western Europe
with retail operations extended to new territories and gross
additions gaining pace. Distribution has also been strengthened in
Africa, notably with a partnership with Facebook to roll out
Express Wi-Fi hotspots across our African footprint.The outturn of
our Third Quarter revenues performance is fully in line with our
expectations and enables us once again to raise the bottom end of
our objective range for the year as a whole, as well as to
reconfirm all other elements of our financial guidance. From a
strategic perspective, recent weeks have been marked by our entry
into the LEO space through our investment in OneWeb, which
represents a compelling entry point to address the considerable LEO
opportunity as well as an additional growth engine for the Group’s
connectivity activities”.
HIGHLIGHTS
Favourable outcome of the Spring renewal campaign with
the US administration with a record-high 95% renewal rate, well
above historical average.
€4.5bn backlog up 6% year-on-year and representing 3.5
years of revenues.
Continued progress in our Fixed Broadband rollout:
- KONNECT satellite providing high-bandwidth coverage of Western
Europe and sub-Saharan Africa with full coverage now
available.
- Progress in Western Europe:
- Retail operations extended to new territories with gross
additions gaining pace;
- Ongoing wholesale discussions with third-party operators;
- Closing of the disposal of our stake in Eurobroadband
Infrastructure (EBI) completing the reorganization of our
distribution.
- Strengthening distribution in Africa:
- Wholesale agreement with Vox in South Africa;
- Testing of wholesale distribution with Orange in DRC;
- Partnership with Facebook to roll out Express Wi-Fi hotspots
across our African footprint.
Nine Month Operating Verticals revenues performance enabling us
to further raise our objective for the Full Year to between
€1,200 million and €1,220 million (versus between €1,190 million
and €1,220 million previously).
All other financial objectives for current and next
fiscal year confirmed.
Eutelsat has signed an agreement to become a leading shareholder
of OneWeb alongside the UK Government and Bharti Global,
securing a compelling entry point to the considerable LEO
opportunity.
THIRD QUARTER REVENUES4
Total revenues for the Third Quarter stood at €301.3 million
down 6.4% on a reported basis and by 5.9% like-for-like.
Revenues of the five Operating Verticals (ie, excluding ‘Other
Revenues’) stood at €294.4 million. They were down by 6.1% on a
like-for-like basis excluding a positive perimeter effect of c.0.6
points (integration of Bigblu Broadband Europe) and a negative
currency effect of c. 3.3 points.
Quarter-on-quarter, revenues of the five Operating Verticals
were down by 3.5% like-for-like.
Unless otherwise stated, all variations indicated hereunder are
on a like-for-like basis, ie, at constant currency and
perimeter.
Broadcast (62% of revenues)
Third Quarter Broadcast revenues amounted to €182.0 million,
down 6.8% year-on-year. They reflect the impact of the
renegotiation of contract terms with Greece’s Forthnet as well as
the anticipated broad slowdown in the pace of new business against
the current operating backdrop affecting notably distributors,
resulting in lower revenues in Europe. As a reminder Q3 2019-20
also included a positive one-off of circa €1m.
On a quarter-on-quarter basis, revenues were down by 2.8%. The
Fourth Quarter is expected to return to stability at a broadly
stable level compared to the Third.
At 31 March 2021, the total number of channels broadcast by
Eutelsat satellites stood at 6,864 stable year-on-year and up 4%
quarter-on-quarter. The number of HD channels stood at 1,853 versus
1,667 a year earlier, up by 11% and represented 27.0% of channels
compared with 24.3% a year earlier.
Data & Professional Video (13% of revenues)
Third Quarter revenues stood at €39.5 million, down by 6.7%
year-on-year.
Fixed Data revenues continue to face price pressure, but this is
now partly offset by growth in volumes, in particular in MENA and
APAC.
Professional Video revenues were once again in decline
year-on-year, reflecting structural headwinds in this application
as well as the phasing of a specific contract which is detrimental
to the Second Half but neutral over the Full Year.
Quarter-on-quarter, therefore, revenues were down by 4.0%.
On the commercial front, a multi-year contract for capacity on
the EUTELSAT 172B satellite was signed with New Zealand’s Mobile
operators to provide 4G mobile backhaul services to Chatham
Islands.
Government Services (13% of revenues)
Third Quarter Government Services revenues stood at €36.7
million, down 0.3% year-on-year. They reflected the contribution of
the EGNOS payload which entered into service on 15 February last
year on EUTELSAT 5 WEST B as well as new business which offset the
negative carry-forward effect of USG renewals in 2020 (85% in
Spring, 80% in Fall).
Quarter-on-quarter, therefore, revenues were down by 2.3%.
The latest renewal campaign with the US Government (Spring 2021)
resulted in an estimated renewal rate of circa 95%.
As a reminder, Fourth Quarter revenues will reflect a tougher
comparison basis, as the same period last year included a positive
one-off related to the temporary relocation of EUTELSAT 7A.
Fixed Broadband (7% of revenues)
Third Quarter Fixed Broadband revenues stood at €20.5 million,
up 1.9% year-on-year. On one hand it reflects the initial revenues
generated by Konnect Europe, including the start of the wholesale
contract with Orange from 1st January, as well as growth at our
African operations. On the other hand revenues reflected the
decline in the contribution of EBI carrying the KA-SAT satellite
and sold to Viasat on 30 April).
Quarter-on-quarter, revenues were down by 12.9%. As a reminder,
the Second Quarter included a high level of terminal sales.
With the EUTELSAT KONNECT satellite now operating with full
coverage, the footprint of our European operations has been
extended to the full territory in Germany, Spain and the UK and we
also launched commercial service in Portugal, resulting in an
acceleration of gross additions in the last couple of months. On
the wholesale side, several discussions with major operators are
ongoing and are progressing well. Finally, with the disposal of our
stake in EBI to Viasat now closed, we have completed the
reorganization of our distribution.
In Africa we are continuing to strengthen our distribution
capabilities, notably through an additional agreement with Vox in
South-Africa, the testing of wholesale distribution with Orange in
DRC, and the recent agreement with Facebook to accelerate the
rollout of Express Wi-Fi hotspots, a proven solution for community
Wifi.
Mobile Connectivity (5% of revenues)
Third Quarter Mobile Connectivity revenues stood at €15.7
million, down 17.2% year-on-year. They continued to reflect the
impact of the Covid-19 crisis on Aero Mobility, weighing on
airtime-related revenues on KA-SAT, and reducing revenues from
certain service providers. Conversely, Maritime revenues remained
on an upward trend on the back of the ramp-up of contracts secured
in the last couple of years. Revenues were stable
quarter-on-quarter.
On the commercial front, following the relocation of the former
EUTELSAT 7A satellite, a multi-year multi-transponder agreement was
signed with Global Eagle for capacity in inclined orbit at the
139°West orbital position highlighting the strength of Eutelsat’s
in-orbit resources and underlying demand on the Aero Mobility
market.
Other Revenues
Other Revenues amounted to €6.9 million in the Third Quarter
versus (€1.1) million a year earlier and €6.8 million in the Second
Quarter. They included a positive €4.3 million impact from hedging
operations compared to a negative impact of (€3.3) million last
year and a positive impact of €3.7 million in the Second
Quarter.
OPERATIONAL AND UTILIZED
TRANSPONDERS
The number of operational transponders at 31 March 2021 stood at
1,366 down by 11 units year-on-year and 14 quarter-on-quarter
reflecting principally the end of life in stable orbit of the
EUTELSAT 48D satellite.
The number of utilized transponders stood at 950, down 9 units
year-on-year basis and by 17 units quarter-on-quarter reflecting
principally the same effect as above.
As a result, the fill rate stood at 69.5% compared with 69.7% a
year ago and 70.1% at end-Dec. 2020.
31 March 2020
31 Dec. 2020
31 March 2021
Operational transponders5
1,377
1,380
1,366
Utilized transponders6
959
967
950
Fill rate
69.7%
70.1%
69.5%
Note: Based on 36 MHz-equivalent transponders excluding
high throughput capacity
BACKLOG
The backlog stood at €4.5 billion at 31 March 2021 versus €4.2
billion a year ago, and €4.4 billion at end-December 2020. The 6%
year-on-year rise reflects the inclusion of the long-term renewal
contract with Sky Italia, the wholesale agreement with Telecom
Italia and the additional EGNOS payload on the future EUTELSAT
HOTBIRD 13G satellite, which are partly offset by natural backlog
consumption.
The backlog was equivalent to 3.5 times 2019-20 revenues, with
Broadcast representing 64%.
31 Mar. 2020
31 Dec. 2020
31 Mar. 2021
Value of contracts (in billions
of euros)
4.2
4.4
4.5
In years of annual revenues
3.2
3.4
3.5
Share of Broadcast
67%
67%
64%
Note: The backlog represents future revenues from
capacity or service agreements and can include contracts for
satellites under procurement.
NINE MONTHS REVENUES
Revenues for the first Nine Months of FY 2020-21 stood at €929.9
million, down by 3.0% on a reported basis.
Revenues of the five Operating Verticals (excluding ‘Other
Revenues’) were down by 5.4% on a reported basis and by 3.5%
like-for-like, excluding a positive perimeter effect of c.0.5
points (integration of Bigblu Broadband Europe) and a negative
currency effect of c.2.3 points. At a 1.14 €/$ rate (rate as per
financial objectives) they stood at €920.3m.
In € millions
9m 2019-20
9m 2020-21
Change
Reported
Like-for-like7
Broadcast
588.1
560.9
-4.6%
-3.5%
Data & Professional Video
132.6
120.9
-8.8%
-5.2%
Government Services
118.3
113.6
-3.9%
+1.6%
Fixed Broadband
57.9
62.6
+8.1%
+2.2%
Mobile Connectivity
62.0
49.6
-20.0%
-14.9%
Total Operating
Verticals
958.9
907.5
-5.4%
-3.5%
Other Revenues
(0.2)
22.3
NR
NR
Total
958.7
929.9
-3.0%
-3.1%
EUR/USD exchange rate
1.11
1.18
FINANCIAL OUTLOOK
On the back of our revenue performance of the first Nine Months,
we are once again raising the bottom end of our FY 2020-21 revenue
objective range (for the five Operating Verticals) to between
€1,200 million and €1,220 million, versus between €1,190 million
and €1,220 million previously8.
All other elements of the financial outlook are confirmed:
- Adjusted Discretionary Free Cash-Flow of €390-420 million9 in
FY 2021-22
- Average Cash Capex10 not exceeding €400 million per annum for
the period July 2020 to June 2022.
- LEAP 2 plan aimed at generating €20-25 million in annual
savings by FY 2021-22.
- Commitment to a sound financial structure to support our
investment grade credit ratings, targeting a medium-term net debt /
EBITDA ratio of around 3x.
- Stable to progressive dividend policy based on the dividend of
0.89 euros paid in November 2020.
This outlook is based on the nominal deployment plan outlined
hereunder.
FLEET DEPLOYMENT
Nominal deployment programme
Since the last quarterly update in February 2021, the launch of
EUTELSAT QUANTUM is now expected in Q3 2021, versus late Q2 2021
previously.
Satellite1
Orbital position
Estimated launch (calendar
year)
Main applications
Main geographic
coverage
Physical Transponders/ Spot
beams
Of which expansion
EUTELSAT QUANTUM
48° East
Q3 2021
Government
Flexible
8 “QUANTUM”
beams
Not applicable
EUTELSAT HOTBIRD 13F
13° East
H2 2021
Broadcast
Europe
MENA
80 Ku2
None
EUTELSAT HOTBIRD 13G
13° East
H1 2022
Broadcast
Europe
MENA
80 Ku2
None
KONNECT VHTS
To be
confirmed
H1 2022
Connectivity
Europe
~230 Ka spot beams
500 Gbps
EUTELSAT 10B
10° East
H2 2022
Mobile Connectivity
EMEA Atlantic & Indian
Ocean
12 Ku
10 C
>100 Ku spot beams
-48 Ku transponders
c. 35 Gbps
EUTELSAT 36D
36° East
H1 2024
Broadcast
Government
Africa, Russia, Europe
70 Ku
None
1 EUTELSAT QUANTUM is a chemical
propulsion satellite. KONNECT VHTS, EUTELSAT HOTBIRD 13F, EUTELSAT
HOTBIRD 13G,EUTELSAT 10B and EUTELSAT 36D are electric propulsion
satellites.
2 Nominal capacity corresponding to the
specifications of the satellites. Total operational capacity at the
HOTBIRD orbital position will remain unchanged with 102 physical
transponders operated, once regulatory, technical and operational
constraints are taken into account.
Changes in the fleet since 30 June 2020
- EUTELSAT KONNECT entered into service and now operates at full
coverage.
- EUTELSAT 12 West B which was operating in inclined orbit has
been de-orbited.
- EUTELSAT 48D ended its life in stable orbit.
Procurement of EUTELSAT 36D
Eutelsat procured the EUTELSAT 36D satellite to succeed EUTELSAT
36B, expected to reach its end of life at the end of 2026, at its
key 36° East orbital position. EUTELSAT 36D will assure all the
main legacy missions of EUTELSAT 36B in Broadcast (Africa and
Russia) and government services (EMEA and Central Asia), with
enhancements to coverage areas and performance.
RECENT EVENTS
Investment in OneWeb
On 27 April 2021, Eutelsat has entered into an agreement with
OneWeb, for the subscription of a c.24% equity stake, becoming a
leading shareholder of the company alongside the UK Government and
Bharti Global. Eutelsat will invest $550 million in OneWeb, with
closing expected in H2 2021 subject to regulatory
authorisations.
Closing of the disposal of EBI
On 30 April 2021, the transaction with Viasat for the disposal
of Eutelsat’s 51% stake in Euro Broadband Infrastructure (EBI), the
company operating the KA SAT satellite, and related European
broadband business, was closed.
Early repayment of €500 million Bond
Eutelsat exercised its option allowing the early repayment of
the €500 million Bond maturing in June 2021 which was redeemed on 1
April 2021. There are no other Bond or Bank Debt maturities before
March 2022.
*******
Third Quarter 2020-21 revenues conference call
A conference call will be held on Tuesday, 11 May 2021 at
18.30 CET / 17.30 GMT / 12.30 EST
To connect to the call, please use the following numbers:
- France: +33 (0) 1 70 72 25 50
- UK: +44 (0) 330 336 9125
- United States: +1 720 543 0197
Access code: 1720393#
Instant replay will be available from 11 May, 22.30 CET to 18
May, 22.00 CET on the following numbers:
- France: +33 (0) 1 70 48 00 94
- UK: + 44 (0) 20 3859 5407
- United States: + 1 719 457 0820
Access code: 1720393#
Financial calendar
Note: The financial calendar is provided for information
purposes only. It is subject to change and will be regularly
updated.
- 30 July 2021: Full Year 2020-21 results
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.
Around 6,800 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 1,200 men and women from 50 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 views and
assumptions as of the date of this document.
Such forward-looking statements involve known and unknown risks.
For illustrative purposes only, such risks include but are not
limited to: risks related to the health crisis; operational risks
related to satellite failures or impaired satellite performance, or
failure to roll out the deployment plan as planned and within the
expected timeframe; risks related to the trend in the satellite
telecommunications market resulting from increased competition or
technological changes affecting the market; risks related to the
international dimension of the Group's customers and activities;
risks related to the adoption of international rules on frequency
coordination and financial risks related, inter alia, to the
financial guarantee granted to the Intergovernmental Organization's
closed pension fund, and foreign exchange risk.
Eutelsat Communications expressly disclaims any obligation or
undertaking to update or revise any projections, forecasts or
estimates contained in this document to reflect any change in
events, conditions, assumptions or circumstances on which any such
statements are based, unless so required by applicable law.
The information contained in this document is not based on
historical fact and should not be construed as a guarantee that the
facts or data mentioned will occur. This information is based on
data, assumptions and estimates that the Group considers as
reasonable.
APPENDIX
Quarterly revenues by application
FY 2019-20
In € millions
Q1
Q2
Q3
Q4
FY
Broadcast
194.7
194.7
198.8
196.4
784.6
Data & Professional Video
43.0
44.8
44.8
42.7
175.3
Government Services
39.3
39.1
40.0
42.8
161.1
Fixed Broadband
19.9
19.2
18.8
18.8
76.7
Mobile Connectivity
19.7
21.5
20.8
16.7
78.7
Total Operating Verticals
316.5
319.3
323.1
317.4
1,276.3
Other Revenues
1.1
(0.2)
(1.1)
2.2
2.0
Total
317.6
319.1
322.0
319.6
1,278.3
FY 2020-21
In € millions
Q1
Q2
Q3
Broadcast
190.6
188.3
182.0
Data & Professional Video
39.5
41.9
39.5
Government Services
38.4
38.5
36.7
Fixed Broadband
20.5
21.6
20.5
Mobile Connectivity
17.7
16.2
15.7
Total Operating Verticals
306.7
306.4
294.4
Other Revenues
8.6
6.8
6.9
Total
315.3
313.2
301.3
1 Like-for-like change. 2 Change at constant currency and
perimeter. The variation is calculated as follows: i) Q3 2020-21
USD revenues are converted at Q3 2019-20 rates; ii) Q3 2020-21
revenues are restated from the contribution of Bigblu Broadband
Europe to revenues. iii) Hedging revenues are excluded from Other
Revenues. 3 Other Revenues include mainly the impact of EUR/USD
revenue currency hedging, the provision of various
consulting/engineering services and termination fees. 4 The share
of each application as a percentage of total revenues is calculated
excluding “Other Revenues”. 5 Number of transponders on satellites
in stable orbit, back-up capacity excluded. 6 Number of
transponders utilized on satellites in stable orbit. 7 Change at
constant currency and perimeter. The variation is calculated as
follows: i) 9-months 2020-21 USD revenues are converted at 9-months
2019-20 rates; ii) 9-months 2020-21 revenues are restated from the
contribution of Bigblu Broadband Europe to revenues. iii) Hedging
revenues are excluded from Other Revenues. 8 Based on a €/$ rate
assumption of 1.14 and including the combined impact of the
acquisition of Bigblu Broadband Europe and the disposal of EBI but
excluding the effect of other changes in perimeter if any. 9 Based
on a €/$ rate assumption of 1.14, excluding one-off impacts such as
hedging, effects of changes in perimeter other than the acquisition
of Bigblu Broadband Europe and the disposal of EBI, and one-off
costs related to specific projects in particular to the LEAP 2
program and to the move to new headquarters. 10 Including capital
expenditure and payments under existing export credit facilities
and other bank facilities financing investments as well as payments
related to lease liabilities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210511005830/en/
Media
Joanna Darlington Tel.: +33 1 53 98 31 07
jdarlington@eutelsat.com
Marie-Sophie Ecuer Tel.: +33 1 53 98 32 45
mecuer@eutelsat.com
Jessica Whyte Tel.: +33 1 53 98 46 21 jwhyte@eutelsat.com
Investors
Joanna Darlington jdarlington@eutelsat.com Tel.: +33 1 53 98 31
07
Cédric Pugni Tel.: +33 1 53 98 31 54 cpugni@eutelsat.com
Alexandre Illouz Tel.: +33 1 53 98 46 81
aillouz@eutelsat.com
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