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Eutelsat Communications: Third Quarter and Nine Month 2018-19 Revenues

Eutelsat Communications  reported revenues for the Third Quarter and Nine Months ended 31 March 2019.

Revenues for the three months to 31 March 2019

In € millions

  Q3 2017-18  

Q3 2018-19

  Year-on-Year Change  

Quarter Change












Video Applications   221.8   217.9   215.4   -2.9%   -2.5%   +0.0%
Government Services   38.0   38.0   39.9   +5.0%   -1.0%   +0.2%
Fixed Data   35.3   35.3   30.4   -13.9%   -17.8%   -7.3%
Fixed Broadband   20.8   20.8   19.1   -8.2%   -9.7%   -5.3%
Mobile Connectivity   17.9   17.9   19.8   +10.6%   +4.7%   +1.3%
Total Operating Verticals   333.8   329.9   324.6   -2.8%   -4.0%   -1.0%

Other Revenues5

  0.6   0.6   12.1   nm   nm   nm
Total revenues   334.4   330.4   336.7   +0.7%   +1.4%   +3.7%
EUR/USD exchange rate   1.21   1.21   1.14  

Rodolphe Belmer, Chief Executive Officer, commented: “The Third Quarter of 2018-19 saw the return to growth in Broadcast on a quarter-on-quarter basis, an improvement in the US Government renewal rate and commercial wins in Maritime Mobility. The Konnect Africa broadband service is showing positive indications of demand but its ramp-up has been significantly hindered by some short-term operational issues. Moreover, we are experiencing softer conditions in Fixed Data and Professional Video. In consequence, revenues for the Operating Verticals at the nine month stage stood at -3%, and we now expect the outturn for FY 2018-19 to be in a similar range, versus our previous objective of ‘broadly stable’.

We are encouraged by the resilience of our core Broadcast business, and we continue to target a return to slight revenue growth in FY 2019-20 on the back of the materialization of delayed business, traction in broadband and the availability of incremental capacity with EUTELSAT 7C and EUTELSAT Quantum. All other financial objectives for the current and following years are also confirmed.

Market conditions continue to support the pertinence of the focus on Discretionary Free Cash Flow generation implemented three years ago, and on which we continue to draw on all levers. In this context, our strengthened group is well placed to benefit from the next growth cycle in our industry driven notably by Fixed Broadband and Mobility. Finally, the outcome of discussions on tax territoriality treatment will lead to significant reduction in our annual tax burden.”


  • Outcome of discussions on tax territoriality treatment to secure a reduction of the order of €70m in our annual tax burden, subject to final formal approval by French Tax administration.
  • Resilience of core Broadcast with return to quarter-on-quarter growth, supporting stable Video revenues;
  • Multi-year, multi-transponder commercial wins in Maritime Mobility including an agreement with Speedcast on EUTELSAT 133 West A and a multiple-satellite deal with Marlink;
  • Recovery in renewal rate with the US Government to circa 85% in Spring;
  • Positive indications of demand for Konnect Africa confirmed, but ramp-up hindered by temporary operational issues;
  • Revenues for the Operating Verticals now expected at circa -3% like-for-like for FY 2018-19 reflecting Fixed Broabdband delays, deterioration in Professional Video and Fixed Data trends and slower than expected materialization of Video pipeline;
  • All other financial objectives confirmed for the current and following year.


Total revenues for the Third Quarter 2018-19 stood at €336.7 million, up 0.7% year-on-year.

Revenues for the five Operating Verticals (ie, excluding ‘Other Revenues’) were down by 4.0% on a like-for-like basis, ie, excluding a negative perimeter effect of c.1.2 points (disposal of the stake in EUTELSAT 25B) and a positive currency effect of c.2.4 points.

Quarter-on-quarter, total revenues were up by 4.3%. The revenues of the Operating Verticals were down 1.0% like-for-like.

Unless otherwise stated, all variations indicated below are on a like-for-like basis, ie, at constant currency and perimeter.

Core businesses

Video Applications (67% of revenues)

Third Quarter Video Applications revenues were down by 2.5% to €215.4 million, on a year-on-year basis. This reflected mostly an accelerated, double-digit decline in Professional Video in a context of intensifying competitive pressure. Professional Video now accounts for less than 8% of Video revenues. Pure Broadcast revenues were stable.

On a quarter-on-quarter basis, total Video revenues were stable while Broadcast revenues recorded a slight rise.

On the commercial front, a multi-transponder contract was secured for a new DTH platform on EUTELSAT 65 West A. On the other hand, other projects in the pipeline were delayed for non-structural reasons and should materialize in the near future.

At 31 March 2019 the total number of channels broadcast by Eutelsat satellites stood at 7,021, up 2.0% year-on-year and by 3.0% stripping out the effect of the disposal of EUTELSAT 25B. HD penetration rose by 11% to 1,509 channels, implying a penetration of 21.5% of channels compared to 19.7% a year earlier.

Government Services (12% of revenues)

Third Quarter Government Services revenues stood at €39.9 million, down 1.0% year-on-year. This reflected on one hand the incremental business secured last year at the 174°East orbital position covering Asia-Pacific, and on the other, the low outturn of the Fall 2018 renewal campaign with the US Government (70%).

On a quarter-on-quarter basis, revenues were stable (+0.2%).

The outturn of the Spring 2019 renewals with the US Government showed an improvement at 85% in value.

Fixed Data (9% of revenues)

Third Quarter Fixed Data revenues stood at €30.4 million, down 17.8% year-on-year. This reflected ongoing pricing pressure in a highly competitive environment as well as softer volumes in Latin America.

On a quarter-on-quarter basis, revenues were down 7.3%.


Fixed Broadband (6% of revenues)

Third Quarter Fixed Broadband revenues stood at €19.1 million, down 9.7% year-on-year. Excluding the expiry of a contract with a Middle-East customer for a spotbeam on EUTELSAT 3B, re-contracted to Taqnia in the Mobile Connectivity vertical, the underlying performance was -7.7%. This reflected a further decline in European Broadband with scarcity of capacity in certain countries and the transition to a new distribution model (Preferred Partnership Programme) which is leading to a decline in activity with legacy distributors, not yet fully compensated by the new model.

Revenues for Konnect Africa are running behind expectations reflecting temporary operational issues (political situation in DRC, regulatory delays in Ivory Coast and more generally logistical issues). As a result, no material revenues are expected in the current financial year. This reflects mostly rollout issues and does not, however, alter our view of the strong potential of this market where we expect a ramp-up next fiscal year.

Fixed Broadband Revenues declined by 5.3% on a quarter-on-quarter basis.

Mobile Connectivity (6% of revenues)

Third Quarter revenues for Mobile Connectivity stood at €19.8 million, up 4.7% year-on-year. They reflected the entry into service of the UnicomAirNet contract on EUTELSAT 172B, the carry-forward impact of the contract with Taqnia at 3°East and 70°East and the ongoing ramp-up of capacity contracts on KA-SAT.

On the commercial front, a multi-year, multi-transponder agreement was signed with Speedcast for capacity dedicated to Maritime Connectivity on EUTELSAT 133 West A, representing another win in this vertical following the conclusion of a multi-satellite deal with Marlink.

Quarter-on-quarter revenues were up 1.3% with the benefit of UnicomAirNet partially offset by the end of a temporary wide-beam contract on EUTELSAT 172B.

Other Revenues

Other Revenues amounted to €12.1 million in the Third Quarter versus €0.6 million a year earlier and -€3.5 million in the previous quarter. They included a significant one-off engineering fee and a -€5.7 million impact from hedging.


The number of operational 36 MHz-equivalent transponders stood at 1,418 at 31 March 2019, broadly stable versus end-December and slightly down year-on-year, mainly reflecting the disposal of EUTELSAT 25B in August 2018.

The number of utilized transponders stood at 960, down 10 units versus end-December. Year-on-year they were up by nine units on a reported basis and up by 17 excluding the disposal of EUTELSAT 25B. The evolution versus end-December principally reflects lower Fixed Data volumes in Latin America. On a year-on-year basis this was more than offset by new contracts in Video as well as the ramp-up at 174°East.

As a result the fill rate stood at 67.7% at end-March 2019 compared to 66.8% one year ago and 68.3% at end-December 2018.

    31 March 2018   31 December 2018   31 March 2019

Operational transponders7

  1,424   1,419   1,418

Utilized transponders8

951 970 960
Fill rate   66.8%   68.3%   67.7%

Note: Based on 36 MHz-equivalent transponders excluding high throughput capacity.


The order backlog9 stood at €4.4 billion at 31 March 2019 versus, €4.6 billion at end-December 2018, reflecting natural backlog consumption in the absence of material Video renewals. It was equivalent to 3.1 times 2017-18 revenues. Video Applications represented 76% of the backlog.


31 March



31 December



31 March


Value of contracts (in billions of euros)   4.6   4.6   4.4
In years of annual revenues based on last fiscal year 3.1 3.3 3.1
Share of Video Applications   83%   77%   76%


Revenues for the first Nine Months of FY 2018-19 stood at €994.8 million, down 2.7%.

Revenues of the five Operating Verticals (excluding ‘Other Revenues’) were down by 3.0% like-for-like, excluding a negative perimeter effect of c.0.5 points (net impact of the acquisition of Noorsat and of the disposal of EUTELSAT 25B) and a positive currency effect of c.1point.

Nine months to 31 March 2019

In € millions


9m 2017-18
IFRS 15 restated



9m 2017-18


9m 2018-19


  Actual change  


Video Applications   664.8   654.9   647.5   -2.6%   -2.1%
Government Services   117.6   117.6   121.7   +3.5%   +0.7%
Fixed Data   108.7   108.7   96.4   -11.4%   -13.9%
Fixed Broadband   63.6   63.6   59.6   -6.3%   -7.1%
Mobile Connectivity   54.9   54.9   59.8   +8.8%   +6.0%
Total Operating Verticals   1,009.7   999.7   985.0   -2.4%   -3.0%
Other Revenues   12.7   12.7   9.7   nm   nm
Total revenues   1,022.4   1,012.5   994.8   -2.7%   -1.7%
EUR/USD exchange rate   1.19   1.19   1.15  


At the Nine Month stage, revenues of the Operating Verticals of -3.0% like-for-like are tracking behind our Full Year objective of ‘Broadly Stable’ reflecting temporary operational issues delaying the ramp-up of Konnect Africa, softer conditions in Fixed Data and Professional Video and the late materialization of some contracts in the Video pipeline. We now expect the outturn for FY 2018-19 to be in the same range of circa -3%12.

We continue to target a return to slight topline growth in FY 2019-2013, which will benefit from the materialization of the delayed business mentioned above, an improvement in the performance of European Broadband, the initial contribution from the EGNOS payload on EUTELSAT 5 West B and the availability of new capacity on EUTELSAT 7C and EUTELSAT QUANTUM.

All other financial objectives for the current and following years are also confirmed:

  • The EBITDA margin (at constant currency) is expected above 78% from FY 2018-19.
  • The estimated Cash Capex13 spend is expected at an average of €400 million per annum for the period July 2017 to June 2020.
  • Discretionary Free Cash Flow is expected to grow at a mid-single digit CAGR in the period July 201714 to June 2020 (at constant currency and excluding the impact of the disposal of the interest in EUTELSAT 25B).
  • The Group is committed to maintaining a sound financial structure to support its investment grade credit rating with a net debt / EBITDA ratio below 3.0x.
  • It also reiterates its commitment to serving a stable to progressive dividend.

This outlook is based on the nominal deployment plan outlined hereunder.


Nominal deployment programme





Estimated launch








Spot beams



36 MHz-
transponders /
Spot beams


Of which

EUTELSAT 7C   7° East   June 2019   Video  

Turkey, Middle-
East, Africa

  44 Ku   49 Ku   19 Ku
EUTELSAT 5 WEST B   5° West   Q3 2019   Video  

Europe, MENA

  35 Ku   35 Ku   None


  H2 2019   Government Services   Flexible   8 “QUANTUM”


  Not applicable   Not applicable


  Q4 2019   Connectivity   Africa


  65 spot beams   75 Gbps   75 Gbps


  H2 2021  

Government Services


  Europe   ~230 spot beams   500 Gbps   500 Gbps


  13° East   H2 2021   Video  



  80 Ku2   73 Ku2   None


  13° East   H2 2021   Video  



  80 Ku2   73 Ku2   None

1 Chemical propulsion satellites (EUTELSAT QUANTUM, EUTELSAT 5 West B) generally enter into service 1 to 2 months after launch. Electric propulsion satellites (EUTELSAT
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 (95 36 Mhz equivalent transponders) operated, once regulatory, technical and operational constraints are taken into account.


Since the last quarterly update in February 2019, the launch of EUTELSAT 5 WEST B is now expected in Q3 2019, versus Q2 2019 previously, with no impact on the revenue profile.

Changes in the fleet

  • EUTELSAT 12 WEST B now operates in inclined orbit.
  • EUTELSAT 70C is being relocated.