SES Year to Date Results in Line with Expectations

Betzdorf, Luxembourg, October 25, 2019-- 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. SES reported revenue of EUR 1,451.9 million, down 3.9% at constant FX.

Highlights of the results include:

  • 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 charge). 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.

Steve Collar, SES 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," said Collar.