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talksatellite EMEA |
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Daily news   |
SES: Solid
YTD 2022 Results November 03, 2022 SES S.A. announces
financial results for the nine and three months
ended 30 September 2022. YTD financial
performance reflects solid execution across the
business, complemented by value-accretive DRS GES
acquisition ·
Revenue of €1,400 million
(+6.1% YOY as reported), Adjusted EBITDA(1) of
€829 million (+0.7% YOY as reported), and Adjusted
Net Profit €277 million (+23.2% YOY as reported)
including contribution from DRS GES (acquired 1
August 2022) and stronger US dollar ·
Growth in Networks (+2.7% YOY(2))
and important renewals secured in Video (-5.6% YOY
including periodic(2))
underpins Full Year standalone outlook(3) of
€1,750-1,810 million in revenue and €1,030-1,070
million in Adjusted EBITDA ·
Expected revenue contribution
from DRS GES acquisition of $85-90 million (from 1
August 2022 to 31 December 2022) ·
Leverage(4) at
4x due to DRS GES acquisition and growth investment;
expected to reduce to around 3.5x by end-2022 US C-band clearing
de-risked to deliver over $3 billion of value;
differentiated investments to drive future long-term
growth ·
SES-20, SES-21, and SES-22
all successfully in orbit. Clear line of sight to
Phase 2 clearing proceeds ($3 billion pre-tax) ·
Additional clearing for
Verizon nearing completion; expect $155 million in
Q4 2022 with balance up to $15 million in early 2023 ·
SES-17 (in service/consuming
backlog) & O3b mPOWER (service introduction Q3 2023)
gross backlog $955 million(5) (up
22% YOY) ·
First O3b mPOWER launch
scheduled for 15 December 2022 with further launches
planned for Q1 2023 ·
Ground-breaking EAGLE-1
partnership advances SES’ leadership in Quantum Key
Distribution and secure connectivity across Europe Steve Collar, CEO of
SES, commented: “Our year-to-date
performance reflects solid ongoing execution across
the business and we remain fully on track to deliver
on our 2022 outlook, to capture significant value
from US C-band, and to position SES for profitable
long-term growth through the deployment of our
state-of-the-art multi-orbit assets and
architecture. Our Networks business is
up 2.7% year-on-year primarily driven by ongoing
success in Cruise and Aviation. SES-17 is now
contributing to growth across the Americas with 13
new deals signed in 8 different geographies, while
Thales InFlyt Experience continues to transition
aircraft successfully. In Government, we have
completed the acquisition of DRS GES more quickly
than expected and integration with our existing US
Government business is well underway. The combined
SES Government Solutions business now boasts scale
and an expanded value proposition to our Government
end-users just as we launch significant new assets
in SES-17 and O3b mPOWER. The first O3b mPOWER
launch is scheduled for 15 December and, together
with two further launches scheduled in Q1 2023, the
constellation will enter service in Q3 2023.
Importantly we have already deployed the O3b mPOWER
environment on the ground, and our customers are
starting to receive O3b mPOWER technology that will
be deployed initially on our existing MEO
constellation. With the successful
launches of our first three C-Band satellites, the
second phase of clearing is de-risked and therefore
we have clear line of sight to $3 billion in
accelerated clearing payments due at the end of
2023. In equally good news, the additional US C-band
clearing for Verizon is nearly complete and we
expect to receive the majority of the $170 million
of agreed proceeds by the end of this year.” Key business and
financial highlights (at constant FX unless
explained otherwise) SES regularly uses
Alternative Performance Measures (APM) to present
the performance of the Group and believes that these
APMs are relevant to enhance understanding of the
financial performance and financial position.
·
Video revenue of €763 million
represents a reduction of 5.6% year-on-year
including the planned impact of lower US wholesale
revenue and periodic revenue of €10 million in Q1
2022. Excluding these two items, Video was 3.3%
lower than YTD 2021 as lower volumes in mature
markets were partially offset by growth in HD+ and
Sports & Events. ·
At 30 September 2022, SES
delivers around 8,000 total TV channels to 366
million TV homes around the world, including around
3,100 High Definition TV channels. 73% of total TV
channels are broadcast in MPEG-4 with an additional
6% broadcast in HEVC. ·
Networks revenue of €636
million included the first contribution from DRS GES
(acquired 1 August 2022) of €32 million. On a ‘same
scope’ basis (excluding DRS GES) Networks grew by
2.7% year-on-year compared with YTD 2021 with growth
in Mobility (of +17.7%) and Fixed Data (of +2.2%),
while the rapid US withdrawal from Afghanistan in Q3
2021 was the main contributor to lower revenue in
Government (-7.0%). ·
Adjusted EBITDA of €829
million represented an Adjusted EBITDA margin of
59.2% (YTD 2021: 62.4%) including recurring
operating expenses of €571 million and an EBITDA
contribution of €4 million from the acquisition of
DRS GES (from 1 August 2022). Adjusted EBITDA
excludes US C-band operating expenses (net of
reimbursement income) of €18 million (YTD 2021: €18
million) and other significant special items of €11
million (YTD 2021: €7 million). ·
Adjusted Net Profit (as
reported) improved by 23% year-on-year to €277
million including a net foreign exchange gain of €87
million (YTD 2021: €24 million gain) and higher
income tax expense of €52 million (YTD 2021: €36
million expense). ·
At 30 September 2022, the
Adjusted Net Debt to Adjusted EBITDA ratio
(including 50% of the €1,175 million of hybrid bonds
as debt) was 4.0 times (YTD 2021: 3.4 times)
reflecting the acquisition of DRS GES for $450
million, capital expenditure for SES-17 and O3b
mPOWER, and costs related to US C-band clearing
ahead of anticipated future reimbursements, and
before receipt of proceeds from additional clearing
for Verizon of $170 million (of which up to $155
million is expected in Q4 2022), and Phase II
accelerated relocation payment of $2,991 million
linked to 5 December 2023 clearing milestone. ·
Contract backlog at 30
September 2022 was €5.1 billion (€6.4 billion gross
backlog including backlog with contractual break
clauses), including DRS GES contract backlog of €0.1
billion (€0.8 billion gross backlog). ·
2022 group revenue and
Adjusted EBITDA outlook (assuming an FX rate of
€1=$1.13, nominal satellite health, and nominal
launch schedule) is unchanged and expected to be
between €1,750-1,810 million and between
€1,030-1,070 million respectively. This excludes the
acquisition of DRS GES which is expected to
contribute an additional $85-90 million to group
revenue for the period 1 August 2022 to 31 December
2022. ·
Capital expenditure (net cash
absorbed by investing activities excluding
acquisitions, financial investments, and US C-band
repurposing) outlook (assuming an FX rate of
€1=$1.13) is also unchanged and expected to be €950
million in 2022 with an average of €460 million for
2023-2026. Operational
performance REVENUE BY BUSINESS
UNIT
Future satellite
launches
CONSOLIDATED INCOME
STATEMENT
SUPPLEMENTARY
INFORMATION QUARTERLY INCOME
STATEMENT (AS REPORTED)
1) Earnings per share
is calculated as profit attributable to owners of
the parent divided by the weighted average number of
shares outstanding during the year, as adjusted to
reflect the economic rights of each class of share.
For the purposes of the EPS calculation only, the
net profit for the year attributable to ordinary
shareholders has been adjusted to include the
coupon, net of tax, on the perpetual bonds. Fully
diluted earnings per share are not significantly
different from basic earnings per share. QUARTERLY OPERATING
PROFIT (AT CONSTANT €/$ FX RATE OF €1: $1.13)
ALTERNATIVE
PERFORMANCE MEASURES SES regularly uses
Alternative Performance Measures (‘APM’) to present
the performance of the Group and believes that these
APMs are relevant to enhance understanding of the
financial performance and financial position. These
measures may not be comparable to similarly titled
measures used by other companies and are not
measurements under IFRS or any other body of
generally accepted accounting principles, and thus
should not be considered substitutes for the
information contained in the Group’s financial
statements.
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