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Eutelsat Communications: First Half 2021-22 Results

February 17, 2022

The Board of Directors of Eutelsat Communications (ISIN: FR0010221234 / Euronext Paris: ETL), chaired by Dominique D’Hinnin, reviewed the financial results for the Half Year ended 31 December 2021.

Key Financial Data


6M to Dec.

6M to Dec.






Revenues - €m




“Operating Verticals” revenues reported - €m




“Operating Verticals” revenues at constant currency and perimeter - €m








EBITDA margin - %1



-0.9 pts

EBITDA margin at constant currency - %



-0.6 pts

Group share of net income - €m




Financial structure




Reported Discretionary Free Cash-Flow - €m1




Adjusted Discretionary Free Cash-Flow - €m1




Net debt - €m




Net debt/EBITDA1



+0.44 pts

Backlog – €bn




Commenting on the First Half, Eva Berneke Chief Executive Officer of Eutelsat Communications, said: “This has been a satisfactory First Half in financial terms, with strong free cash flow generation and a further industry leading EBITDA margin, despite the decline in revenues, testifying to our fundamentally robust business model and stringent financial discipline. The First Half has seen a number of important commercial and operational milestones, notably with the entry into service of EUTELSAT QUANTUM, strong progress on our Fixed Broadband roll-out, the cementing of our position in OneWeb and the receipt of the first tranche of our C Band proceeds. Newly at the helm, I am impressed by the technical expertise, asset quality and long-term commercial traction within Eutelsat. Although we have mechanically revised down our medium-term revenue expectations on the back of delayed availability of capacity, I am confident we have the elements in place to enable us to return to growth from FY 2023-24 and continue to deliver long-term value to our shareholders.”


· New Chief Executive Officer, Eva Berneke, took office on 1st January 2022.

· First Half Operating Vertical revenues down 4.2% on a like-for-like basis, broadly in line with expectations and within the range of objectives for the Full Year.

· Industry-leading profitability with a 76.4% EBITDA margin in the First Half at constant currency, despite revenue decline.

· Adjusted Discretionary Free Cash-Flow of €203m, well on track to reach full year objective.

· $125m proceeds related to Phase I of C-Band transition received in December.

· Sustained progress in our Fixed Broadband strategy

oFollowing recent contracts with Hispasat (Spain) and Deutsche Telekom (Germany), four of the five most populous European markets are now covered by wholesale or distribution deals with major operators, including France (Orange) and Italy (TIM);

oGrowing momentum in Africa, evidenced by agreements with Telecom operators Globacom in Nigeria and Vodacom in Tanzania, and with the service provider Intersat for Gambia and Guinea Bissau.

· Successful entry into service of EUTELSAT QUANTUM bringing unprecedented flexibility to address government and mobility markets with four beams out of eight at a well-advanced stage of commercialization after a few months of operations

o Two beams already secured

§ One beam with a customer in the Middle East for maritime Mobility;

§ One beam in government services with a USG service provider.

oWell-advanced discussions for the commercialization of two additional beams;

o Strong pipeline of opportunities with both USG and non-USG customers.

· Investment in OneWeb closed making Eutelsat the number two shareholder in one of the few global LEO constellations, a critical infrastructure to serve long-term Telecom needs.

· Updated revenues objectives

o For FY 2021-22, revenues expected in our predicted range, albeit in the lower half;

o For the medium-term, revenue objectives mechanically revised to reflect delayed availability of KONNECT VHTS and EUTELSAT 10B;

o Return to topline growth expected in FY 2023-24 on the back of incremental capacity.

· Adjusted DFCF objectives confirmed.

· Dividend policy (stable to progressive dividend) confirmed.


In € millions

6 months to Dec.

6 months to Dec.









Data & Professional Video





Government Services





Fixed Broadband





Mobile Connectivity





Total Operating Verticals





Other Revenues4










EUR/USD exchange rate




Total revenues in the First Half stood at €572 million, down 9.0% on a reported basis and by 4.7% like-for-like.

Revenues of the five Operating Verticals (ie, excluding ‘Other Revenues’) stood at €569 million. They were down by 4.2% on a like-for-like basis excluding a negative perimeter effect of circa 3 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.

Second Quarter revenues stood at €285 million down 5.0% like-for-like. Revenues of the five Operating Verticals stood at €284 million, down 5.1% year-on-year and by 1.0% quarter-on-quarter on a like-for-like basis.

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

Broadcast (62% of revenues)

First Half Broadcast revenues were down 7.5% to €351 million, reflecting mostly three items: lower revenues in Europe due largely to the carry-forward effect of a slowdown in the pace of new business last year, the temporary headwind of the partial renewal of capacity with Nilesat at 7/8°West, and a negative impact of circa one point reflecting a positive one-off booked in the First Quarter of 2020-21 as well as lower revenues from Fransat.

Second Quarter revenues stood at €173 million down by 8.6% year-on-year and 3.1% quarter-on-quarter.

The trend is expected to progressively improve as the comparison basis becomes easier from the Second Half and the available capacity at 7/8°West is gradually resold.

Data & Professional Video (14% of revenues)

First Half revenues stood at €78 million, down by 4.1% year-on-year.

In Fixed Data (two thirds of this application), improved volume trends are now offsetting most of the negative impact of competitive pressure.

Professional Video (one third of revenues), recorded a high-single digit decline on the back of the unfavourable phasing of a specific contract as well as the ongoing structural headwinds in this application.

Second Quarter revenues stood at €39 million, down 6.7% year-on-year, but up by 1.4% quarter-on-quarter.

We expect the full year decline for this application to remain broadly consistent with the trend of the First Half.

Government Services (13% of revenues)

First Half Government Services revenues stood at €74 million, down by 3.8%, reflecting the negative carry-forward effect of USG renewals with, in particular, a 75% renewal rate in Fall 2021 as a result of the geopolitical context in MENA, partly offset by new business.

Second Quarter revenues stood at €37 million, down by 5.9% year-on-year and by 2.0% quarter-on-quarter.

The Second Half will reflect the full effect of the above-mentioned headwinds.

Fixed Broadband (5% of revenues)

First Half revenues stood at €30 million, up 37.3% on a like-for-like basis. This reflected the contribution from the wholesale agreements with Orange, TIM and, from November 2021, Hispasat as well as, to a lesser extent the growth of our African operations.

Second Quarter revenues stood at €16 million. On a like-for-like basis, they were up 24.7% year-on-year, and 5.9% quarter-on-quarter.

The First Half saw material progress in the roll-out of our Fixed Broadband strategy with four of the five most populated countries in Europe now covered by distribution or wholesale agreements with major operators. A distribution agreement was signed with Deutsche Telekom on the EUTELSAT KONNECT satellite for the German coverage as well as a multi-year wholesale commitment from Hispasat for the Iberian capacity on EUTELSAT KONNECT. Both agreements could be extended to KONNECT VHTS in the future.

In Africa a multi-year, multi-Gbps wholesale capacity contract was secured with Globacom, Nigeria’s second largest telecom operator as well as a service agreement with Vodacom Tanzania, the country’s leading telecommunications company. A contract was also signed with Intersat for the entire capacity covering Gambia and Guinea Bissau. In addition, several spotbeams on the HTS payload of the EUTELSAT 65 West A satellite were selected by Mexican service providers to address Internet connectivity needs under a government-sponsored rural schools connectivity project.

These tailwinds will benefit the Second Half which will see a continuation of significant double-digit organic growth.

Mobile Connectivity (6% of revenues)

First Half revenues stood at €37 million, up 9.8% like-for-like, reflecting in particular the contribution of the contract with Anuvu. Maritime mobility also continued to record a sound performance driven by the ramp-up of contracts with service providers signed in previous years and the above-mentioned agreement on EUTELSAT QUANTUM.

Second Quarter revenues stood at €19 million, up 19.6% year-on-year and by 11.0% quarter-on-quarter.

On the commercial front, the global partnership with Marlink has been extended to Asia-Pacific and the Americas, including incremental capacity commitments on multiple satellites across our fleet. This comes on top of the agreement with a customer in the Middle-East on EUTELSAT QUANTUM for maritime mobility.

This positive dynamic is expected to translate into double-digit growth for the Full Year.

Other Revenues

In the First Half, Other Revenues amounted to €4 million versus €15 million a year earlier. They included a €2 million negative impact from hedging operations versus a positive effect of €6 million a year earlier.


The number of operational transponders at 31 December 2021 stood at 1,380, broadly stable year-on-year and compared to end-June 2021, with no entry into service of any new regular capacity or end of stable-orbit life of any satellite over the last 12 months.

The number of utilized transponders stood at 974, up by seven units year-on-year and down by seven units compared to end June, the latter reflecting notably the return of capacity by Nilesat.

As a result, the fill rate stood at 70.6% compared to 70.1% a year earlier and 71.2% at end-June.


31 Dec. 2020

30 June 2021

31 Dec. 2021

Operational transponders5




Utilized transponders6




Fill rate




Note: Based on 36 MHz-equivalent transponders excluding high throughput capacity, EUTELSAT QUANTUM and satellites in inclined orbit.


The backlog7 stood at €4.2 billion at 31 December 2021 versus 4.4 billion a year earlier and at end June 2021. The natural erosion of the backlog in the First Half more than offset the contribution of the partial renewal with Nilesat and the wholesale contract with Hispasat.

The backlog was equivalent to 3.4 times 2020-21 revenues, and Broadcast represented 64% of the total.


31 Dec.

30 June

31 Dec.

Value of contracts (in billions of euros)




In years of annual revenues based on previous fiscal year




Share of Broadcast application





EBITDA stood at €436 million at 31 December 2021 compared with €484 million a year earlier, down by 10.0%. The EBITDA margin stood at 76.4% at constant currency (76.1% reported) versus 77.0% a year earlier, reflecting lower revenues. Opex were €8m lower than last fiscal year reflecting the favourable effect of changes in perimeter, lower Bad Debt and continued strict cost discipline in the legacy businesses. In the context of the LEAP 2 cost-saving program, €24 million savings have been fully secured for current fiscal year, in the high end of the 20-25 million annual savings target range.

Group share of net income stood at €166 million versus €137 million a year earlier, up by 20.8% and representing a margin of 29%. This reflected:

· Lower depreciation and amortisation ((€243) million at 31 December 2021 compared with (€260) million a year earlier) as a result in particular of the disposal of the KA-SAT satellite and of the end of the amortization period of certain in-orbit assets.

· Other operating income of €84m (compared to expenses of €8 million last year) including the $125m payment related to Phase I of C-Band proceeds, partly offset by some asset impairments.

· net financial result of (€35) million (versus (€47) million a year earlier), reflecting a favourable evolution of foreign exchange gains and losses.

· tax rate of 24% (versus 15% last year) reflecting the 30% tax rate applied to the C-Band proceeds.

· Negative income from associates ((€13) million) reflecting the contribution of the stake in OneWeb since September.


In H1 2021-22, net cash flow from operating activities amounted to €363 million, €72 million lower than a year earlier due principally to the decline in EBITDA.

Cash Capex amounted to €98 million (versus €117 million last year); it reflects the phasing of satellite program milestones and is not representative of the expected Full Year figure.

Interest and other fees paid net of interest received amounted to €70 million versus €61 million last year. All the coupon payments related to our bond issuances now fall due in the First Half (four maturities representing a nominal amount of €2.3bn) whereas in FY 21, a coupon on a €500 million issue fell due in the Second Half.

Discretionary Free Cash-Flow amounted to €195 million on a reported basis, down €62 million. Adjusted Discretionary Free Cash-Flow as per the financial outlook definition8 stood at €203 million, down €62 million or 23.5%.


At 31 December 2021, net debt stood at €3,081 million, up €426 million versus end-June. It mainly reflected, on one hand, €195 million in Discretionary Free Cash-Flow generated in the First Half and C-Band proceeds of $125 million, and on the other, the dividend payment of €222 million (including minority interests) and the outflow in respect of inorganic investments of €495m, mostly OneWeb. Other items (mostly variations related to leases, structured debt and the foreign exchange portion of the cross-currency swap) contributed to the increase in net debt for a net impact of €14 million.

The net debt to EBITDA ratio stood at 3.53 times, compared to 3.09 times at end-December 2020 and 2.88 times at end-June 2021. As a reminder, December represents a peak in the annual leverage profile reflecting the timing of the dividend payment. The picture is exacerbated this year by the timing of the investment in OneWeb whereas only a quarter of C-Band proceeds have been received.

The average cost of debt after hedging stood at 2.5% (2.3% in H1 2020-21). The weighted average maturity of the Group’s debt stood at 4.5 years, compared to 4.3 years at end-December 2020.

Liquidity remained strong, with undrawn credit lines and cash around €1.5 billion.


The Annual General Meeting of Shareholders of 4 November 2021 approved the payment of a dividend of €0.93 per share in respect of the Financial Year ended 30 June 2021. The dividend was paid on November 18, 2021.


On 8 September 2021, Eutelsat completed its initial investment in OneWeb of 550 million U.S. dollars announced in April. On 6 October, a call option on a portion of the latest OneWeb funding round subscribed by Bharti was exercised for a consideration of 165 million9 U.S. dollars.

As a result, Eutelsat now owns 22.9% of OneWeb10.


Nominal deployment programme

Compared to the last quarterly update in October 2021, the entry into service of KONNECT VHTS has been delayed from the first half to the second half of calendar 2023. Furthermore, while still expected within the H1 2023 window, the entry into service of the EUTELSAT 10B satellite has been delayed versus our previous expectations. This reflects the impact of both manufacturing delays and their knock-on effects, including pairing difficulties, related to launch rescheduling, in the context of global Covid crisis.

All other data remains unchanged.



entry into


Main geographic

Spot beams

Of which


10° East

H1 2023


Atlantic & Indian Ocean

12 Ku
10 C
>100 Ku spot beams

-48 Ku
c. 35 Gbps


13° East

H1 2023



80 Ku2
EGNOS payload

EGNOS payload


To be


H2 2023



~230 Ka spot beams

500 Gbps


13° East

Q2/Q3 2023



80 Ku2



36° East

H2 2024


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.


First Half revenues were broadly in line with expectations, albeit at the lower end of our guidance range for FY 2021-22. The geopolitical situation in the Middle East has resulted in a headwind for Government Services which already partly materialized in the Fall 2021 renewal campaign with the US Department of Defence, and is also expected to impact the Spring 2022 campaign. Elsewhere, although the available resources are drawing strong commercial interest, the resale of capacity at 7/8°West is taking slightly longer than expected to materialize and will therefore contribute lower than expected to revenues in FY 2021-22. As a result, we now expect an outturn in the lower half of our Operating Verticals Revenue guidance range for the Full Year of €1,110 to €1,150 million11 and are reducing the top end of this range to €1,130 million.

Elsewhere, the delay in the availability of both KONNECT VHTS and EUTELSAT 10B has a mechanical effect on our expectations for subsequent years.

As a result, return to topline growth in FY 2022-23 is no longer achievable, although the trend will materially improve relative to FY 2021-22.

Revenues are now expected to return to growth in FY 2023-24 on the back of incremental capacity.

All other objectives are confirmed as follows:

· Cash Capex12 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 dividend policy of a stable to progressive dividend is also reiterated.

This outlook is based on the revised nominal deployment plan outlined above.


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