SES S.A. announces financial results for the
three months ended 31 March 2024 and a solid start to the 2024
financial year.
- Revenue of €498 million (+2.5% YOY(1)) and Adjusted EBITDA(2)
of €275 million (+4.7% YOY)
- Networks up 9.6% YOY(1) including periodic revenue, with Video
performance (-5.2% YOY(1)) in line with expectations
- More than €125 million of new business and contract renewals
signed in Q1 2024
- Adjusted Free Cash Flow of €38 million net inflow compared with
€(41) million net outflow in Q1 2023
- Net Leverage at 1.5x(3) including cash & cash equivalents
of €2.4 billion
- Landmark quarter with 2nd generation MEO constellation, O3b
mPOWER, beginning customer services in April 2024
- €220 million dividend payment (€0.50 per A-share) made to
shareholders in April, complemented by on-going share buyback of up
to €150 million and interim dividend of €110 million dividend
payment (€0.25 per A-share) to be paid in October 2024
- Outlook(4) for FY 2024 Revenue, Adjusted EBITDA, and capital
expenditure on track and re-affirmed
Adel Al-Saleh, CEO of SES, commented: “The first quarter
results demonstrate our solid start to the year, and we continued
to deliver commercial momentum across the business, underpinning
our FY 2024 financial outlook which is on track and unchanged.
Our Networks business now accounts for over 50% of revenue and
delivered YOY growth including periodic revenue from a contract
modification which allowed us to recontract capacity on our highly
contended MEO fleet and generate incremental cash flows. In Video,
our Sports & Events offering continued to be the standout
performer, adding to its impressive line-up of customers with an
exciting new agreement with a global tier one sports brand to
distribute live content to audiences across the world.
April 2024 delivered a landmark milestone for SES with the entry
into commercial service of O3b mPOWER, our next generation MEO
constellation, strengthening our capability to deliver competitive
and differentiated customer solutions in valuable, high growth
government, mobility, and fixed data markets. The next O3b mPOWER
satellites (7-8) are on track be launched in late 2024 launch and
bring improved resiliency to the network which will be further
expanded with the launch of satellites 9-11 plus 12 & 13 in
2025 and late 2026 respectively.”
Key business and financial highlights (at constant FX unless
explained otherwise)
SES regularly uses Alternative Performance Measures (APM) to
present the performance of the group and believes that these APMs
are relevant to enhance understanding of the financial performance
and financial position.
€ million
Q1 2024
Q1 2023
∆ as reported
∆ at constant FX
Average €/$ FX rate
1.09
1.07
Revenue
498
490
+1.5%
+2.5%
Adjusted EBITDA
275
265
+3.8%
+4.7%
Adjusted Net Profit
77
64
+20.0%
n/m
Adjusted Net Debt / Adjusted
EBITDA
1.5x
3.6x
n/m
n/m
“At constant FX” refers to comparative
figures restated at the current period FX, to neutralise currency
variations.
Networks (54% of total revenues) revenue of €268 million
increased 9.6% year on year driven by growth in Mobility (+24.5%
including periodic revenue) and Government (+6.1%). Fixed Data
revenue (-0.5% year on year) was in line with Q1 2023 as new
revenue added was offset by the impact of periodic revenue
recognised in the prior period.
Video (46% of total revenues) revenue of €228 million
represented a reduction of 5.2% compared with Q1 2023, mainly
driven by lower revenue in mature markets which were partially
offset by expansion in Sports & Events revenue.
Adjusted EBITDA of €275 million represented an Adjusted EBITDA
margin of 55% (Q1 2023: 54%). Adjusted EBITDA excludes significant
special items of €6 million (Q1 2023: €13 million), comprising net
U.S. C-band expenses of €1 million (Q1 2023: net expenses of €4
million) and expense of other significant special items of €5
million (Q1 2023: €9 million).
Adjusted Net Profit of €77 million was €13 million, or 20.0%,
higher than Q1 2023 mainly reflecting the higher year on year
Adjusted EBITDA and net interest income of €6 million (Q1 2023: net
interest expense of €23 million) which included the benefit of
earning interest income on the group’s balance of cash & cash
equivalents.
Adjusted Net Debt to Adjusted EBITDA ratio (including 50% of
€625 million of hybrid bond as debt) on 31 March 2024 was 1.5
times, (31 March 2023: 3.6 times, 31 December 2023: 1.5 times)
including cash & cash equivalents of €2,403 million. In January
2024, SES called and repaid the €550 million hybrid bond and
expects to repay approximately €450 million of additional upcoming
debt maturities.
The total amount of remaining U.S. C-band clearing cost
reimbursements expected to be received in future is now
approximately $480 million and SES is continuing to engage with
insurers regarding the claim of $472 million relating to O3b mPOWER
satellites 1-4.
Contract backlog on 31 March 2024 was €4.0 billion (€5.0 billion
gross backlog including backlog with contractual break
clauses).
The Full Year 2023 dividend of €0.50 per A-share and €0.20 per
B-share was paid to shareholders on 18 April 2024. For Full Year
2024, SES will move to a semi-annual distribution with an interim
dividend of €0.25 per A-share (€0.10 per B-share) to be paid in
October 2024 and final dividend, subject to shareholder approval,
of at least €0.25 per A-share (€0.10 per B-share) to be paid in
April 2025.
The share buyback programme of up to €150 million was started in
November 2023 and is being executed under the authorisation given
by the Annual General Meeting of shareholders held on 6 April 2023.
On 31 March 2024, 9 million A-shares had been purchased at an
average price of approximately €5.70 per A-share. The aggregate
value of the programme shall not exceed €150 million, and the
shares acquired are intended to be cancelled, reducing the total
number of voting and economic shares in issue.
For Full Year 2024, group revenue and Adjusted EBITDA (assuming
an FX rate of €1=$1.09, nominal satellite health, and nominal
launch schedule) are expected to be in the range of €1,940-2,000
million and €950-1,000 million respectively, with growth in
Networks revenue expected to mostly offset lower year-on-year Video
revenue.
Capital expenditure (net cash absorbed by investing activities
excluding acquisitions, financial investments, U.S. C-band
repurposing, and assuming an FX rate of €1=$1.09) is expected to be
in the range of €500-550 million in 2024 with an average annual
capital expenditure of approximately €350 million for the period
2025-2028.
Operational performance
REVENUE BY BUSINESS UNIT
Q1 2024
Revenue (€ million) as
reported
Change (YOY) at constant
FX
Average €/$ FX rate
1.09
Video
228
-5.2%
Networks
268
+9.6%
Government
125
+6.1%
Fixed Data
59
-0.5%
Mobility
84
+24.5%
Other
2
n/m
Group Total
498
+2.5%
“At constant FX” refers to comparative
figures restated at the current period FX, to neutralise currency
variations.
Future satellite launches
Satellite
Region
Application
Launch Date
ASTRA 1P
Europe
Video
Summer 2024
O3b mPOWER (satellites 7-8)
Global
Fixed Data, Mobility, Government
Late 2024
O3b mPOWER (satellites 9-11)
Global
Fixed Data, Mobility, Government
2025
ASTRA 1Q
Europe
Video, Fixed Data, Mobility,
Government
2026
SES-26
Africa, Asia, Europe, Middle East
Video, Fixed Data, Mobility,
Government
2026
EAGLE-1
Europe
Government
2026
O3b mPOWER (satellites 12-13)
Global
Fixed Data, Mobility, Government
2026
Final launch dates are subject to
confirmation by launch providers.
CONSOLIDATED INCOME STATEMENT
€ million
Q1 2024
Q1 2023
Average €/$ FX rate
1.09
1.07
Revenue
498
490
U.S. C-band repurposing
income
1
2
Operating expenses
(230)
(240)
EBITDA
269
252
Depreciation expense
(139)
(148)
Amortisation expense
(19)
(17)
Operating profit
111
87
Net financing income/(costs)
5
(29)
(Loss) / profit before
tax
116
58
Income tax expense
(43)
(3)
Net Profit attributable to
owners of the parent
73
55
Basic and diluted loss per
A-share (in €)(1)
0.16
0.10
Basic and diluted loss per
B-share (in €)(1)
0.06
0.04
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 assumed coupon, net of tax, on the perpetual bonds.
€ million
Q1 2024
Q1 2023
Adjusted EBITDA
275
265
U.S. C-band income
1
2
U.S. C-band operating
expenses
(2)
(6)
Other significant special
items
(5)
(9)
EBITDA
269
252
€ million
Q1 2024
Q1 2023
Adjusted Net Profit
77
64
U.S. C-band income
1
2
U.S. C-band operating
expenses
(2)
(6)
Other significant special
items
(5)
(9)
Tax on significant special
items
2
4
Net profit attributable to
owners of the parent
73
55
SUPPLEMENTARY INFORMATION
QUARTERLY INCOME STATEMENT (AS
REPORTED)
€ million
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Average €/$ FX rate
1.07
1.08
1.08
1.07
1.09
Revenue
490
497
507
536
498
U.S. C-band income
2
1
2,715
26
1
Other income
-
-
-
5
-
Operating expenses
(240)
(251)
(251)
(355)
(230)
EBITDA
252
247
2,971
212
269
Depreciation expense
(148)
(146)
(153)
(156)
(139)
Amortisation expense
(17)
(29)
(21)
(22)
(19)
Non-cash impairment
-
-
(1,553)
(2,123)
-
Operating profit /
(loss)
87
72
1,244
(2,089)
111
Net financing income /
(costs)
(29)
(18)
(2)
7
5
Profit/ (loss) before
tax
58
54
1,242
(2,082)
116
Income tax (expense) /
benefit
(3)
(17)
(472)
316
(43)
Non-controlling interests
-
-
-
(1)
-
Net profit/ (loss)
55
37
770
(1,767)
73
Basic earnings / (loss) per
share (in €) (1)
Class A shares
0.10
0.07
1.73
(4.04)
0.16
Class B shares
0.04
0.03
0.69
(1.62)
0.06
Adjusted EBITDA
265
265
262
233
275
Adjusted EBITDA margin
54%
53%
52%
44%
55%
U.S. C-band income
2
1
2,715
26
1
Other income
-
-
-
5
-
U.S. C-band operating
expenses
(6)
(7)
(4)
(30)
(2)
Other significant special
items
(9)
(12)
(2)
(22)
(5)
EBITDA
252
247
2,971
212
269
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.
ALTERNATIVE PERFORMANCE MEASURES
SES regularly uses Alternative Performance Measures (‘APM’) to
present the performance of the group and believes that these APMs
are relevant to enhance understanding of the financial performance
and financial position. These measures may not be comparable to
similarly titled measures used by other companies and are not
measurements under IFRS or any other body of generally accepted
accounting principles, and thus should not be considered
substitutes for the information contained in the group’s financial
statements.
Alternative Performance Measure
Definition
Reported EBITDA and EBITDA
margin
EBITDA is profit for the period
before depreciation, amortisation, net financing cost, and income
tax. EBITDA margin is EBITDA divided by revenue.
Adjusted EBITDA and Adjusted EBITDA
margin
EBITDA adjusted to exclude
significant special items of a non-recurring nature. The primary
exceptional items are the net impact of the repurposing of U.S.
C-band spectrum, restructuring charges, costs associated with the
development and/or implementation of merger and acquisition
activities, specific business taxes, one-off regulatory charges
arising outside ongoing operations. Adjusted EBITDA margin is
Adjusted EBITDA divided by revenue.
Adjusted Free Cash Flow
Net cash generated by operating
activities less net cash absorbed by investing activities, interest
paid on borrowings, coupon paid on perpetual bond and lease
payments, and adjusted to exclude the effect of cash flows
generated by significant special items of a non-recurring nature.
The primary exceptional items are the net impact of the repurposing
of U.S. C-band spectrum, restructuring charges, costs associated
with the development and/or implementation of merger and
acquisition activities, specific business taxes, one-off regulatory
charges arising outside ongoing operations.
Adjusted Net Debt to Adjusted
EBITDA
Adjusted Net Debt to Adjusted
EBITDA represents the ratio of Net Debt plus 50% of the group’s
hybrid bonds (per the rating agency methodology) divided by the
last 12 months’ (rolling) Adjusted EBITDA.
Adjusted Net Profit
Net profit attributable to owners
of the parent adjusted to exclude the after-tax impact of
significant special items.
Presentation of Results:
A presentation of the results for investors and analysts will be
hosted at 9.30 CET on 30 April 2024 and will be broadcast via
webcast and conference call. The details for the conference call
and webcast are as follows:
U.K.
+44 (0) 33 0551 0200
France
+33 (0) 1 70 37 71 66
Germany
+49 (0) 30 3001 90612
U.S.A.
+1 786 697 3501
Confirmation code
SES
Webcast registration
https://channel.royalcast.com/landingpage/ses/20240430_2/
The presentation is available for download from
https://www.ses.com/investors/financial-results and a replay will
be available shortly after the conclusion of the presentation.
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About SES
SES has a bold vision to deliver amazing experiences everywhere
on earth by distributing the highest quality video content and
providing seamless data connectivity services around the world. As
a leader in global content connectivity solutions, SES owns and
operates the world’s only geosynchronous orbit and medium earth
orbit (GEO-MEO) constellation of satellites with the unique
combination of global coverage and high performance. By leveraging
its vast and intelligent, cloud-enabled network, SES delivers
high-quality connectivity solutions anywhere on land, at sea or in
the air, and is a trusted partner to the world’s leading
telecommunications companies, mobile network operators,
governments, connectivity and cloud service providers,
broadcasters, video platform operators and content owners. SES’s
video network carries over 6,400 channels, reaching 363 million
households, delivering managed media services for both linear and
non-linear content. The company is headquartered in Luxembourg and
listed on Paris and Luxembourg stock exchanges (Ticker: SESG).
Further information is available at: www.ses.com.
Disclaimer
This presentation does not, in any jurisdiction, including
without limitation 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 occur or 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.
1) At constant FX (comparative figures restated to
neutralise currency variations) 2) Excluding operating
expenses/income recognised in relation to U.S. C-band repurposing
and other significant special items (disclosed separately).
3) Adjusted Net Debt to Adjusted EBITDA, including 50% of
€625M hybrid bond as debt 4) Financial outlook assumes a €/$
FX rate of €1 = $1.09, nominal satellite health, and nominal launch
schedule.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240429774579/en/
Richard Whiteing Investor Relations Tel: +352 710 725 261
richard.whiteing@ses.com
Suzanne Ong External Communications Tel: +352 710 725 500
suzanne.ong@ses.com
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