11 November 2011

SES S.A. reports financial results for the three months and nine months ended 30 September 2011.

SES also made progress in developing its Central and Eastern European business, concluding an important strategic partnership with Russian operator Gazprom Space Services (using ASTRA 1F satellite capacity), and signing a new DTH platform, Magticom, for Georgia.

The financial results for the first nine months are in line with the 2011 revenue and EBITDA growth guidance. The delay to the QuetzSat-1 and SES-4 launches will reduce the revenue growth in the fourth quarter, while the satellite programme economics remain unaffected by the launch delays and will continue to support our primary strategic objective of long term value creation.

For the full year, SES is in line to achieve the revenue and EBITDA growth guidance of approximately 3%, apart from the revenue shortfall of EUR 10 million (and the associated EBITDA) directly resulting from the launch delays. Once again, SES has demonstrated the resilience of the FSS satellite sector to the economic downturn.”

In the year to date, recurring revenue grew by 3.0%, to EUR 1,283.4 million. This increase resulted from the developments in the third quarter as well as from growth delivered in the first six months, which was strongly supported by the full contribution in the period from the ASTRA 3B, NSS-12 and SES-7 satellites.

Recurring operating expenses only marginally increased over the prior year, despite the increased proportion of revenue from services activities. Recurring EBITDA grew by 3.7% to EUR 965.3 million.

The recurring EBITDA margin was 75.2% for the nine months, compared to 74.7% in the prior year period. Costs associated with SES’ organisational realignment totalled EUR 11.3 million, the majority of which was recorded in the second quarter of this year.

Depreciation and amortisation charges of EUR 341.5 million were EUR 28.4 million lower than the corresponding amount of EUR 369.9 million reported in 2010. Approximately half of this decrease is due to the impact of the weaker US dollar in the current period, the balance being related to value adjustments made in the prior year period, and the impact of the extension of assumed commercial lives of certain satellites.

Operating profit increased by 3.1% to EUR 609.9 million.

Year to date net financing charges of EUR 105.0 million were substantially lower than the prior year period, as a consequence of lower net interest costs and the continued favourable development of the net foreign exchange result. Income tax expense was EUR 41.3 million, benefiting from investment tax credits on the ASTRA satellite replacement programme.

The combination of the favourable operating performance and lower financing and tax charges contributed to the 34.3% increase in profit of the Group to EUR 446.7 million for the nine months.

SES managed indebtedness below its targeted Net Debt/EBITDA ceiling of 3.3x through the period.

At the end of the third quarter, net debt/EBITDA stood at 3.13x.

Third quarter reported revenue of EUR 430.1 million was affected by the substantially weaker US dollar, compared to the prior year period. Removing the currency effect, as well as non-recurring items, recurring revenue rose by 3.2% to EUR 430.2 million, principally driven by new contracts in Europe, as well as by the first contribution from the important strategic partnership with Gazprom Space Services. In addition to these positive infrastructure-related developments, European services activities (mainly HD+) increased their contribution significantly.

Timing of operating costs and an increased contribution from lower margin services activities were the primary factors impacting EBITDA growth compared to the year before. Recurring EBITDA was 2.8% ahead of the prior year period at EUR 320.8 million.

The third quarter profit of the Group rose 9.4% to EUR 154.6 million.

At the end of September 2011, the group’s transponder utilisation had risen to 1,012 of the 1,250 commercially available transponders in the fleet, a utilisation rate of 81.0% (compared to 78.7% in 2010).

A number of new capacity agreements were signed in the period. Ukrainian operator Zeonbud took capacity at 31.5E to support the rollout of Digital Terrestrial TV in Ukraine. ProSiebenSat.1 signed an agreement for an additional transponder to extend its Austrian HDTV line-up, while the Austrian state broadcaster also contracted an additional transponder for its own HD and SD services.

In Georgia, broadcaster Magticom has initiated its DTH platform – the first in Georgia – through three transponders at 31.5E. This agreement brings the total number of DTH platforms worldwide broadcast by SES satellites to 43.

An important strategic partnership has been signed with Gazprom Space Systems, operator of the Yamal satellites in Russia. Under the agreement, SES has moved the ASTRA 1F satellite to 55E to provide interim broadcasting capacity before the Yamal 402 satellite is launched at the end of 2012.

SES will also have rights to commercialise capacity on that satellite. The partnership supports a wide range of services and enables high-quality access to the important business opportunities in the Russian market.

In the Pacific region, Pacific TV Center moved its operations onto SES satellites NSS-5 and NSS-9, thus improving signal reach, quality and reliability.

The above developments, and significant contracts signed in the first half represented renewal and new business totalling approximately EUR 1.6 billion, enabling SES to increase its contract backlog to EUR 7.1 billion at the end of September, an increase of 9% over the end of 2010.

European services activities developed positively: