- Third Quarter Operating Verticals revenues of €285m
- -3.5%1 year-on-year
- -0.7%1 quarter-on-quarter
- Broadly stable Broadcast revenues
quarter-on-quarter
- Strong growth in Fixed Broadband and Mobile
Connectivity
- Nine Month operating vertical revenues down 4.0%1
year-on-year, in line with expectations
- All financial objectives confirmed
Regulatory News:
Eutelsat Communications (ISIN: FR0010221234 - Euronext Paris:
ETL) (Paris:ETL) reports revenues for the Third Quarter and Nine
Months ended 31 March 2022.
In € millions
Q3 2020-21
Q3 2021-22
Change
Reported
Like-for-like2
Broadcast
182.0
172.5
-5.2%
-6.8%
Data & Professional Video
39.5
40.0
+1.3%
-2.7%
Government Services
36.7
34.6
-5.7%
-11.3%
Fixed Broadband
20.5
16.9
-17.6%
+30.2%
Mobile Connectivity
15.7
20.7
+31.8%
+24.5%
Total Operating
Verticals
294.4
284.7
-3.3%
-3.5%
Other Revenues3
6.9
2.1
-69.6%
+84.7%
Total
301.3
286.8
-4.8%
-2.7%
EUR/USD exchange rate
1.22
1.13
Eva Berneke, Chief Executive Officer of Eutelsat Communications,
said: “The Third Quarter saw robust delivery, with an improvement
in Broadcast trend and strong double-digit growth in both Fixed
Broadband and Mobile Connectivity whereas Government Services
inevitably reflected the geopolitical environment in the Middle
East. Recent months have seen meaningful progress on the commercial
front in particular with the successful commercialization of
EUTELSAT QUANTUM. Elsewhere, our global distribution agreement with
OneWeb to address key connectivity verticals enhances the
competitive position of both companies and represents a first step
towards the development of combined GEO/LEO solutions. Overall,
revenues at the Nine Month stage are in line with our expectations,
and we confirm all our financial objectives.”
HIGHLIGHTS
- Third Quarter operating vertical revenues of €285m,
broadly stable (-0.7%) quarter-on-quarter.
- Improvement in Broadcast revenue trend (-6.8%
year-on-year in the Third Quarter after -8.6% in the second
quarter) with Third Quarter revenues broadly stable (-0.8%)
relative to the Second Quarter.
- Robust double-digit growth for both Fixed Broadband and
Mobile Connectivity in the Third Quarter, at respectively circa
plus 30% and plus 25% year-on-year, highlighting the significant
potential in Connectivity.
- Strong progress in the commercialization of EUTELSAT
QUANTUM with six beams (out of eight) already sold after six
months of operation and the entire capacity expected to be fully
sold in the coming months.
- Global distribution partnership secured with OneWeb to
address key connectivity verticals, deepening cooperation and
showcasing operational synergies between the two companies.
- Nine Month Operating Verticals of €853m down 4.0% year-on-year
and in line with expectations, enabling us to reiterate our
objective for the Full Year of between €1,110 million and
€1,130 million4.
- All other financial objectives also confirmed.
THIRD QUARTER REVENUES5
Total revenues for the Third Quarter stood at €287 million down
4.8% on a reported basis and by 2.7% like-for-like.
Revenues of the five Operating Verticals (ie, excluding ‘Other
Revenues’) stood at €285 million. They were down by 3.5% on a
like-for-like basis excluding a negative perimeter effect of circa
three points from the disposal of Euro Broadband Infrastructure
(EBI) on 30 April 2021 and a positive currency effect of circa
three points.
Quarter-on-quarter, revenues of the five Operating Verticals
were down by 0.7% like-for-like.
Unless otherwise stated, all variations indicated hereunder are
on a like-for-like basis, ie, at constant currency and
perimeter.
Broadcast (61% of revenues)
Third Quarter Broadcast revenues amounted to €173 million, down
6.8% year-on-year, representing an improvement in trend relative to
the Second Quarter (-8.6% year-on-year). The revenue decline
reflected predominantly the effect of the partial renewal of
capacity with Nilesat at 7/8°West, which is not offset by the
resale of this capacity, and elsewhere, a slight erosion in the
underlying business in Europe. Excluding the 7/8°West impact,
Broadcast revenues experienced a low-single-digit decline.
Quarter-on-quarter, revenues were broadly stable with the
slight, -0.8%, erosion reflecting the carry-forward effect of the
above-mentioned 7/8°West headwind which impacted revenues from
mid-October onwards. Revenues were flat excluding this item.
Revenues are expected to remain broadly stable in the Fourth
Quarter relative to the Third Quarter.
Data & Professional Video (14% of revenues)
Third Quarter Data & Professional Video revenues stood at
€40 million, down by 2.7% year-on-year.
In Fixed Data, which represents two thirds of this application,
improved volume trends are now offsetting most of the negative
impact of competitive pressure.
The Professional Video revenues trend saw a slight uptick,
reflecting the phasing of a specific contract which is beneficial
to the Second Half but neutral over the Full Year, as well as
growth of occasional use.
Quarter-on-quarter revenues were stable reflecting notably the
above-mentioned Professional Video tailwind as well as the broad
stabilization of Fixed Data.
On the commercial front, a multi-year agreement was signed with
Tuvalu Telecommunications Corporation for connectivity on the
EUTELSAT 172B satellite to support the extension of corporate
networks for government offices and businesses of the Tuvalu
Islands.
We expect this application to decline at a mid-single digit pace
over the Full Fiscal Year, consistent with previous
indications.
Government Services (12% of revenues)
Third Quarter Government Services revenues stood at €35 million,
down 11.3% year-on-year. This reflected the negative carry-forward
effect of US Government renewals, driven by the withdrawal of
troops from Afghanistan with in particular a renewal rate of only
75% in Fall 2021, as well as the end of life in stable orbit of
EUTELSAT 174A.
Quarter-on-quarter, revenues were down by 8.0% with the full
effect of Fall 2021 renewals now in the quarterly base.
On the commercial front, as anticipated in February, the latest
renewal campaign with the US Government (Spring 2022) resulted in a
below-average renewal rate estimated at above 70% reflecting the
continued impact of the geopolitical context in the Middle East.
Elsewhere, the commercialisation of EUTELSAT QUANTUM made further
strong progress with five beams now secured for Government
Services, of which three for incremental business and two to favour
the renewal of existing business.
In the Fourth Quarter, the full effect of Spring 2022 renewals
relative to the Third Quarter should be largely offset by the
ramp-up of new business on EUTELSAT QUANTUM.
Fixed Broadband (6% of revenues)
Third Quarter Fixed Broadband revenues stood at €17 million, up
30.2% year-on-year on a like-for-like basis. They reflected the
contribution from the wholesale agreements with TIM and Hispasat,
the strong dynamic of our African operations and the ramp-up of the
multi-beam agreement signed on EUTELSAT 65 West A with several
Mexican service providers. Conversely, revenues also reflected the
erosion of the legacy business of Bigblu Broadband on the KA-SAT
satellite.
Quarter-on-quarter, revenues were up by 7.7%.
The favourable momentum in this application is set to continue
into the Fourth Quarter.
Mobile Connectivity (7% of revenues)
Third Quarter Mobile Connectivity revenues stood at €21 million,
up 24.5% year-on-year. They reflected the carry-forward effect of
the contract signed with Anuvu last year as well as the ongoing
strong growth of Maritime, driven by the ramp-up of contracts with
service providers signed in recent years and by the agreement inked
earlier this year on EUTELSAT QUANTUM with a customer in the Middle
East.
Quarter-on-quarter, revenues were up by 4.5%.
On the commercial front, we continue to see a robust pipeline of
business for maritime mobility highlighting both the strong demand
in this vertical as well as the quality of our in-orbit resources
and services.
In the Fourth Quarter, growth is expected to decelerate as the
comparison base will notably integrate the above-mentioned
agreement with Anuvu.
Other Revenues
‘Other Revenues’ amounted to €2.1 million in the Third Quarter
versus €6.9 million a year earlier and €1.0 million in the Second
Quarter. They included a negative (€2.8) million impact from
hedging operations compared to a positive impact of +€4.3 million
last year and a negative impact of (€2) million in the Second
Quarter.
OPERATIONAL AND UTILIZED
TRANSPONDERS
The number of operational transponders as of 31 March 2022 stood
at 1,358 down by 22 units quarter-on-quarter, the latter reflecting
principally the end of life in stable orbit of EUTELSAT 174A.
The number of utilized transponders stood at 961, down 13 units
quarter-on-quarter, reflecting principally the same effect as above
as well as the Fall 2021 renewal campaign with the US
Government.
As a result, the fill rate stood at 70.7% compared with 69.5% a
year ago and 70.6% at end-December 2021.
31 March 2021
31 Dec. 2021
31 March 2022
Operational transponders6
1,366
1,380
1,358
Utilized transponders7
950
974
961
Fill rate
69.5%
70.6%
70.7%
Note: Based on 36 MHz-equivalent transponders excluding
high throughput capacity
BACKLOG
The backlog stood at €4.0 billion as of 31 March 2022 versus
€4.5 billion a year ago, and €4.2 billion at end-December 2021,
reflecting its natural consumption in the absence of major
broadcast renewals this quarter.
It was equivalent to 3.3 times 2020-21 revenues, with Broadcast
representing 63%.
31 Mar. 2021
31 Dec. 2021
31 Mar. 2022
Value of contracts (in billions
of euros)
4.5
4.2
4.0
In years of annual revenues
3.5
3.4
3.3
Share of Broadcast
64%
64%
63%
Note: The backlog represents future revenues from
capacity or service agreements and can include contracts for
satellites under procurement.
NINE MONTH REVENUES
Revenues for the first Nine Months of FY 2021-22 stood at €859
million, down by 7.6% on a reported basis and by 4.0% at constant
currency and perimeter.
Revenues of the five Operating Verticals (excluding ‘Other
Revenues’) were down by 6.0% on a reported basis. They were down by
4.0% on a like-for-like basis excluding a positive effect from
currency representing circa one point and a negative perimeter
effect of circa three points from the disposal of Euro Broadband
Infrastructure (EBI) on 30 April 2021 only partly offset by the
consolidation of Bigblu Broadband Europe since 1st October
2020.
At a 1.20 €/$ rate (rate as per financial objectives) they stood
at €840 million.
In € millions
9m 2020-21
9m 2021-22
Change
Reported
Like-for-like8
Broadcast
560.9
523.0
-6.8%
-7.3%
Data & Professional Video
120.9
117.8
-2.6%
-3.7%
Government Services
113.6
108.4
-4.6%
-6.3%
Fixed Broadband
62.6
47.0
-24.9%
+34.4%
Mobile Connectivity
49.6
57.2
+15.3%
+14.5%
Total Operating
Verticals
907.5
853.4
-6.0%
-4.0%
Other Revenues
22.3
5.6
-74.9%
-10.4%
Total
929.9
859.0
-7.6%
-4.1%
EUR/USD exchange rate
1.18
1.16
FINANCIAL OUTLOOK
On the back of the performance of the first Nine Months, we
confirm our objective for the Full Year of Operating Vertical
Revenues of between €1,110 to €1,130 million9.
All other elements of the financial outlook are also
confirmed:
- Cash Capex10 not exceeding €400 million per annum for each of
the next three fiscal years (FY 2021-22 / FY 2022-23 / FY
2023-24).
- Adjusted Discretionary Free Cash Flow of between €400 million
and €430 million in FY 2021-22 at a €/$ rate of 1.20. Adjusted
Discretionary Free Cash Flow is expected to grow in FY 2022-23 and
in FY 2023-24.
- The 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
solicited investment grade credit ratings targeting a medium-term
net debt / EBITDA ratio of around 3x.
The policy of a stable to progressive dividend is also
reiterated.
This outlook is based on the nominal deployment plan outlined
below. It assumes no material deterioration of revenues generated
from Russian customers.
FLEET DEPLOYMENT
Nominal deployment program
Since the last quarterly update in February 2022, there is no
change in the nominal deployment program below.
Satellite1
Orbital position
Estimated entry into service
(calendar year)
Main applications
Main geographic
coverage
Physical Transponders/ Spot
beams
Of which expansion
EUTELSAT 10B
10° East
H1 2023
Mobile Connectivity
EMEA Atlantic & Indian
Ocean
12 Ku 10 C >100 Ku spot
beams
-48 Ku c. 35 Gbps
EUTELSAT HOTBIRD 13G
13° East
H1 2023
Broadcast
Europe MENA
80 Ku2 EGNOS payload
EGNOS payload
KONNECT VHTS
To be confirmed
H2 2023
Connectivity
Europe
~230 Ka spot beams
500 Gbps
EUTELSAT HOTBIRD 13F
13° East
Q2/Q3 2023
Broadcast
Europe MENA
80 Ku2
None
EUTELSAT 36D
36° East
H2 2024
Broadcast Government
Africa, Russia, Europe
70 Ku
UHF payload
UHF payload
1 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 2021
- EUTELSAT QUANTUM was launched on 30 July 2021 and entered
service in November 2021.
- The lease agreement for capacity on the YAHSAT 1B and Al Yah 3
satellites was terminated in the First Quarter of Fiscal Year
2021-22.
- EUTELSAT 48E, which was in inclined orbit, terminated its life
in October 2021.
- EUTELSAT 174A is operating in inclined orbit since January
2022.
EXPOSURE TO RUSSIAN CRISIS
As disclosed in the latest Universal Registration Document,
Eutelsat derived circa 6.3% of its revenues from Russian customers
in Fiscal Year 2020-21 and has no material revenue exposure to
Ukraine. The Group also leases capacity on four satellites owned by
the Russian operator, RSCC, serving mostly the above-mentioned
Russian customers and representing a net present value (included in
Net Financial Debt) of €322 million as of 31 December 2021.
Furthermore, the OneWeb low-orbit constellation in which
Eutelsat owns a 22.9% stake had to suspend the remaining six
upcoming launches which were planned from Baikonur Cosmodrome.
Since then, OneWeb entered into agreements with SpaceX and New
Space India that will enable to resume satellite launches.
Consistent with its Code of Ethics and as a provider of
infrastructure globally Eutelsat upholds a commitment to neutrality
and is therefore guided by sanctions and by the decisions of its
competent regulatory bodies, which it strictly applies. In this
context, Eutelsat immediately implemented EU Council Regulation
2022/350, suspending the broadcasting activities of Russian
television stations such as Russia Today.
*******
Third Quarter 2021-22 revenues conference call
A conference call will be held on Thursday, 12 May 2022
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 25
07 - UK: +44 (0) 330 165
4045 - United States: +1
720-543-0214
Access code: 5156191#
Instant replay will be available from 12 May, 22.30 CET to 19
May, 22.30 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: 5156191#
Financial calendar Note: The financial calendar is
provided for information purposes only. It is subject to change and
will be regularly updated. 3 August 2022: Full Year 2021-22
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 7,000 television channels operated by leading media groups
are broadcast by Eutelsat to one billion viewers equipped for DTH
reception or connected to terrestrial networks. Committed to
promoting all facets of sustainable development across its business
activities, Eutelsat leverages its in-orbit resources to help
bridge the digital divide while maintaining a safe and uncluttered
space environment. As an attractive and socially responsible
employer, 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 Reported revenues for FY 2020-21 and FY
2021-22
The table below shows quarterly reported revenues.
In € millions
Q1 2020-21
Q2 2020-21
Q3 2020-21
Q4 2020-21
FY 2020-21
Q1 2021-22
Q2 2021-22
Q3 2021-22
Broadcast
190.6
188.3
182.0
180.1
741.0
177.6
172.8
172.5
Data & Professional Video
39.5
41.9
39.5
40.6
161.4
38.4
39.4
40.0
Government Services
38.4
38.5
36.7
37.7
151.4
37.0
36.8
34.6
Fixed Broadband
20.5
21.6
20.5
17.7
80.2
14.6
15.5
16.9
Mobile Connectivity
17.7
16.2
15.7
17.6
67.2
17.1
19.4
20.7
Total Operating Verticals
306.7
306.4
294.4
293.7
1,201.2
284.8
283.9
284.7
Other Revenues
8.6
6.8
6.9
10.4
32.7
2.6
1.0
2.1
Total
315.3
313.2
301.3
304.1
1,233.9
287.3
284.9
286.8
Quarterly Proforma revenues for FY 2020-21
For comparability purposes, the table below shows proforma
quarterly revenues, which exclude the contribution of EBI from 1st
July 2020.
In € millions
Q1 2020-21
Q2 2020-21
Q3 2020-21
Q4 2020-21
FY 2020-21
Broadcast
190.6
188.3
182.0
180.1
741.0
Data & Professional Video
39.4
41.8
39.4
40.5
161.1
Government Services
38.4
38.5
36.7
37.7
151.4
Fixed Broadband
5.6
12.3
12.6
14.9
45.4
Mobile Connectivity
17.3
15.9
15.5
17.5
66.3
Total Operating Verticals
291.3
296.8
286.2
290.8
1,165.2
Other Revenues
8.6
6.8
6.9
10.4
32.7
Total
300.0
303.6
293.1
301.2
1,197.9
1 Like-for-like change. 2 Change at constant currency and
perimeter. The variation is calculated as follows: i) Q3 2021-22
USD revenues are converted at Q3 2020-21 rates; ii) the
contribution of Eurobroadband Infrastructure (EBI) is excluded from
Q3 2020-21 revenues; iii) Hedging impact is 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 Based on a
€/$ rate of 1.20. 5 The share of each application as a percentage
of total revenues is calculated excluding “Other Revenues”. 6
Number of transponders on satellites in stable orbit, back-up
capacity excluded. 7 Number of transponders utilized on satellites
in stable orbit. 8 Change at constant currency and perimeter. The
variation is calculated as follows: i) 9-months 2021-22 USD
revenues are converted at 9-months 2020-21 rates; ii) the
contribution of BigBlu Broadband Europe (BBB) from 1st July 2021 to
30 September 2021 is excluded from 9-months 2021-22 revenues; iii)
the contribution of Eurobroadband Infrastructure (EBI) is excluded
from 9-months 2020-21 revenues; iv) Hedging revenues are excluded
from Other Revenues. 9 Based on a €/$ rate assumption of 1.20 and
current perimeter. 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/20220512005593/en/
Media Marie Sophie Ecuer Tel.: +33 1 53 98 32 45
mecuer@eutelsat.com
Daphné Joseph-Gabriel Tel.: +33 1 53 98 32 45
djosephgabriel@eutelsat.com
Investors 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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