EUTELSAT THIRD QUARTER AND NINE MONTH 2014-2015 REVENUES
May 12, 2015
Eutelsat Communications today reported revenues for the third quarter and nine months ended 31 March 2015.
Reminder: Third quarter and nine month 2013-14 revenues have been restated. Please refer to table in the appendix.
Three months to 31 March 2015
In € millions |
Q3 2013-14 reported | Q3 2013-14 Restated | Q3 2014-15 | Actual change | Change at constant currency |
| Video Applications | 219.7 | 214.7 | 225.3 | +4.9% | +3.3% |
| Data Services | 54.1 | 50.6 | 58.1 | +14.7% | +4.8% |
| Value-Added Services | 20.5 | 20.5 | 23.4 | +14.0% | +13.4% |
| Government Services | 40.2 | 44.0 | 49.5 | +12.5% | -0.5% |
| Other revenues | 7.8 | 7.8 | 11.4 | ns | ns |
| Sub-total | 342.3 | 337.7 | 367.7 | +8.9% | +4.5% |
| Non-recurring revenues | - | - | - | - | - |
| Total | 342.3 | 337.7 | 367.7 | +8.9% | +4.5% |
| EUR/USD exchange rate | 1.368 | 1.197 |
In € millions |
9m 2013-14 reported | 9m 2013-14 restated | 9m 2014-15 | Actual change | Change at constant currency |
| Video Applications | 650.2 | 650.6 | 677.7 | +4.2% | +3.4% |
| Data Services | 137.9 | 156.7 | 165.5 | +5.6% | +1.3% |
| Value-Added Services | 63.7 | 63.7 | 74.8 | +17.4% | +17.0% |
| Government Services | 113.8 | 131.4 | 141.7 | +7.8% | +1.8% |
| Other revenues | 23.6 | 22.4 | 30.8 | ns | ns |
| Sub-total | 989.3 | 1 024.8 | 1 090.5 | +6.4% | +4.4% |
| Non-recurring revenues | 0.5 | 0.5 | - | ns | ns |
| Total | 989.8 | 1 025.3 | 1 090.5 | +6.4% | +4.4% |
| EUR/USD exchange rate | 1.355 | 1.272 |
Third quarter revenues stood at €367.7 million, up 4.5% on a pro-forma basis at constant currency and excluding non-recurring revenues. The impact of the appreciation of the dollar was even more marked during the period, adding 4.4 points to top-line growth.
The quarter saw the successful launch of EUTELSAT 115 West B, the first commercial all-electric satellite. The Group also concluded the early refinancing of an €800 million bank term loan which will extend its debt maturity and reduce financial charges by circa €15 million before tax on an annualised basis.
In the context of the current economic environment in Russia, Eutelsat entered into discussions with its Russian clients with the aim of alleviating some contract terms. These discussions have been partially completed. The impact on third quarter revenues was of around 1 million euros. For fiscal year 2014-2015, the impact is estimated at less than five million euros. For FY 2015-16, the additional impact is estimated in the region of 12 to 15 million euros.
THIRD QUARTER REVENUE ANALYSIS BY APPLICATION
VIDEO APPLICATIONS (63% of revenues)
Third quarter revenues from Video Applications were up 3.3% like-for-like to €225.3 million. This mainly reflected the entry into service of the Express-AT1 satellite in May 2014, the good performance of Eutelsat Americas and higher revenues at 28° East in Europe, 7/8° West in the Middle East and North Africa and 16° East in Sub-Saharan Africa and Central Europe. These more than offset lower revenues at the HOT BIRD position following the non-renewal of contracts with some service providers in the first half.
Recent contracts include the long-term extension of capacity agreements on EUTELSAT 16A with United Group, the leading TV and broadband service provider in South Eastern Europe, additional capacity booked by Azam TV at 7° East for its pay-TV operations in East Africa, and a new contract with Strong Media for broadcasting in West Africa from 16° East. Televisa Networks also renewed and increased capacity on satellites commercialised by Eutelsat Americas.
At 31 March 2015, the total number of channels broadcast by Eutelsat satellites stood at 5,747, up 10.3% year-on-year. HDTV penetration continued to increase, representing 11.7% of channels compared to 10.0% a year earlier. A total of 672 channels were broadcast in high definition across Eutelsat’s fleet at the end of the third quarter, up from 522 a year earlier.
DATA SERVICES (16% of revenues)
Data Services third quarter revenues stood at €58.1 million, up 4.8% year-on-year on a like-for-like basis. Growth was driven by Latin America thanks to both regular capacity and the HTS payload on EUTELSAT 3B used to provide broadband services in Brazil, and by the ramp-up of regular capacity on EUTELSAT 3B in other regions. As in previous quarters, the data environment remains challenging in EMEA.
On a quarterly sequential basis, the underlying trend continues to show signs of stability.
VALUE-ADDED SERVICES (7% of revenues)
Value-Added Services third quarter revenues amounted to €23.4 million, up 13.4% year-on-year.Uptake on KA-SAT continued, with 180,000 broadband terminals activated at 31 March 2015, up from 140,000 a year earlier. The slower quarter-on-quarter growth of the customer base mainly reflects the loading of certain beams covering France, Ireland and the UK.
The sequential decline in third quarter revenues reflected a negative one-off in the maritime mobility business.
GOVERNMENT SERVICES (14% of revenues)
Third quarter revenues from Government Services stood at €49.5 million, down 0.5% on a like-for-like basis. They benefited from the full-quarter effect of the contract signed last year with the Afghan ministry of Telecommunications for capacity on EUTELSAT 48D as well as the good performance of Eutelsat Americas. However, new contracts failed to offset the impact of non-renewals in the last 12 months.
The outcome of third quarter 2014-2015 contract renewals with the US administration was comparable to that of the first half at circa 90%. However, competitive pressure resulting from the impact of troop withdrawals and ongoing budgetary constraints is strong, and visibility is limited. The outcomes of recent contract renewals should therefore not be extrapolated for future renewals.
OTHER AND NON-RECURRING REVENUES
Other revenues amounted to €11.4 million in the third quarter compared with €7.8 million last year and notably included revenues related to the agreements with SES at 28.5° East.
There were no non-recurring revenues in the third quarter.
OPERATIONAL AND LEASED TRANSPONDERS
The number of operational transponders at 31 March 2015 was up by 58 year-on-year to 1,035, reflecting mainly the entry into service of Express-AT1, Express-AT2 and EUTELSAT 3B. The fill rate stood at 76.6% compared to 77.0% a year earlier.
The slight increase of fill rate compared to the end of December 2014 reflected mainly the ramp-up of new capacity on
EUTELSAT 3B.
| 31 March
2014 |
31 December 2014 | 31 March 2015 | |
| Number of operational transponders | 977 | 1,033 | 1,035 |
| Number of leased transponders | 752 | 788 | 793 |
| Fill rate | 77.0% | 76.3% | 76.6% |
ORDER BACKLOG
The order backlog stood at €6.4 billion at 31 March 2015, up by 11% year-on-year. It was equivalent to 4.6 times 2013-2014 revenues. Video Applications represented 84% of the backlog.
The backlog increased by 5% compared with end-December. The integration of the renewal for capacity by nc+ at the HOT BIRD position and the extension of agreements with United Group at 16° East more than offset backlog consumption.
| 31 March 2014 | 31 December 2014 | 31 March 2015 | |
| Value of contracts (in billions of euros) | 5.8 | 6.1 | 6.4 |
| In years of annual revenues based on last fiscal year | 4.2 | 4.4 | 4.68 |
| Share of Video Applications | 87% | 84% | 84% |
Our objective of average revenue growth of above 5% for the two year period from July 2015 to June 2017 is also confirmed, subject to the final outcome of Russian contract renegotiations, no significant deterioration in government services and adherence to our nominal deployment plan. Growth over this period will however be back-end loaded, as fiscal year 2015-2016 will reflect the launch delay of EUTELSAT 9B as well as the impact of Russian renegotiations.
