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Eutelsat Communications: First Half 2022-23 Results

February 17, 2023

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 2022.

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




EBITDA margin at constant currency - %




Group share of net income - €m




Financial structure




Reported Discretionary Free Cash-Flow - €m1




Adjusted Discretionary Free Cash-Flow - €m1




Net debt - €m



-85.0 M€

Net debt/EBITDA1



+0.02 pt

Backlog – €bn




Commenting on the First Half, Eva Berneke Chief Executive Officer of Eutelsat Communications, said: “Eutelsat delivered a solid First Half, with revenues from our Operating Verticals within the range of our Full Year objectives and industry-leading profitability maintained with a 73% EBITDA margin. This financial performance enables us to confirm our standalone outlook for the Full Year 2022-23, and for the outer years. The start of the year has also seen considerable operational success, with the ongoing strong commercial ramp-up of EUTELSAT QUANTUM, and a record number of four satellite launches, providing both service continuity and incremental capacity which will pave the way for our return to growth in FY 2023-24. Elsewhere, OneWeb continues to deliver positive commercial ramp-up, and the proposed deal to combine our two companies is on track for closing in calendar Q2/Q3 2023. In the long term, our new orbital assets as well as the projected combination with OneWeb will unlock significant potential in markets where the demand for connectivity is booming.”

Notes: This press release contains figures from the consolidated half-year accounts prepared under IFRS and subject to a limited review by the Auditors. They were reviewed by the Audit Committee on 15 February 2023 and approved by the Board of Directors on 16 February 2023. EBITDA, EBITDA margin, Net debt / EBITDA ratio, Cash Capex, Discretionary Free Cash-Flow and Adjusted Discretionary Free Cash-Flow are considered Alternative Performance Indicators. Their definition and calculation are in Appendix 3 of this document.


· First Half Operating Vertical revenues down 4.1% on a like-for-like basis, within the range of objectives for the Full Year.

· Industry-leading profitability with a 73.0% EBITDA margin in the First Half, despite revenue decline.

· Adjusted Discretionary Free Cash-Flow of €121m reflected the phasing of satellite programs and remains on track to reach full year objective.

· Operational successes, with the launch of four satellites in the First Half, paving the way for return to growth and ensuring seamless service for existing customer:

oKONNECT VHTS with 500 Gbps of capacity dedicated to Fixed Broadband and Mobile Connectivity across Europe, and with ~€450m of secured backlog, namely from Orange, Telecom Italia, and TAS.

oEUTELSAT 10B with incremental 35 Gbps of HTS Ku-band capacity addressing demand in Mobile Connectivity.

oHOTBIRD 13F and HOTBIRD 13G to ensure broadcasting service continuity at our flagship 13° East position.

oHOTBIRD 13G hosting the EGNOS GEO-4 payload.

· Rapid ramp-up of EUTELSAT QUANTUM with seven out of eight beams commercialized in its first year of service:

oActive discussions for the commercialization of the final beam.

oFive of the seven commercialized beams are incremental capacity.

oBusiness shaping up to be more balanced towards Mobile Connectivity, reflecting buoyant demand.

· Further progress in our Telecom Pivot strategy, with the successful reorganization of the company structure along two business units (Video and Connectivity) to reinforce customer centricity and better address market opportunities, and the ramp-up of our Eutelsat Advance services.

· All standalone Full Year 2022-23 and longer-term financial objectives confirmed.

· OneWeb commercial ramp-up progressing according to plan

oSecured backlog of $0.8bn at end-December 2022, +€200m vs. October 2022’s Strategic Update.

oRevenues on track to reach the $50m objective by end-June 2023.

· Closing of OneWeb deal expected in calendar Q2/Q3 2023, with regulatory approval workstreams progressing according to plan (no EU referral considered, FR and US still ongoing).


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 €574 million, up 0.3% on a reported basis and down by 6.1% like-for-like.

Revenues of the five Operating Verticals (ie, excluding ‘Other Revenues’) stood at €582 million. They were down by 4.1% on a like-for-like basis, excluding a positive currency impact of €37 million.

Second Quarter revenues stood at €286 million down 6.0% like-for-like. Revenues of the five Operating Verticals stood at €291 million, down 3.9% year-on-year and by 0.6% 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 (58% of revenues)

First Half Broadcast revenues were down 6.7% to €339 million, reflecting the temporary headwind of the partial renewal of capacity with Nilesat at 7/8°West and the negative impact of the anticipated non-renewal of a capacity contract with Digitürk from mid-November, as well as lower revenues in Europe, related to volume decrease with certain resellers.

Second Quarter revenues stood at €169 million down by 6.0% year-on-year and 1.4% quarter-on-quarter, reflecting principally the phase-out of the Nilesat impact from mid-October, while the Digitürk impact started to materialize only from mid-November onwards.

The Full Year trend should see a slight deterioration compared to the First Half, as the impact of the sanctions against certain Russian and Iranian channels will be mainly embarked in the Second Half.

Data & Professional Video (14% of revenues)

First Half revenues stood at €83 million, down by 2.5% year-on-year.

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

Professional Video (one third of revenues) recorded a mid-single digit decline, namely on the back of lower occasional use activity in Q1, especially in the Americas, as well as the ongoing structural headwinds.

Second Quarter revenues stood at €42 million, down 2.6% year-on-year, but up by 1.3% quarter-on-quarter.

Topline for the year as a whole is expected to decrease in the mid-single digit range, due to the seasonality of some contracts notably in Professional Video.

Government Services (12% of revenues)

First Half Government Services revenues stood at €67 million, down by 20.3% year-on-year, reflecting the negative carry-forward effect of prior US Department of Defence renewals with, in particular, a 65% renewal rate in the Fall 2022 campaign, following a 75% renewal rate in Spring 2022, due to the specific US geopolitical context.

Second Quarter revenues stood at €32 million, down by 23.0% year-on-year and by 8.9% quarter-on-quarter.

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

Fixed Broadband (6% of revenues)

First Half revenues stood at €37 million, up 17.0% year-on-year. They reflected the contribution from the wholesale agreements with Orange, TIM, and more recently Hispasat and Swisscom as well as, to a lesser extent, the growth of the African operations.

Second Quarter revenues stood at €19 million. On a like-for-like basis, they were up 13.2% year-on-year, and down by 1.2% quarter-on-quarter.

Over the Full Year, Fixed Broadband should be broadly stable, as the comparison basis now better reflects the above-mentioned contracts, namely in Europe and Africa. Growth is expected to re-accelerate in FY 2023-24 on the back of the entry into service of KONNECT VHTS.

Mobile Connectivity (10% of revenues)

First Half revenues stood at €56 million, up 32.7% year-on-year, reflecting in particular the commercial success of EUTELSAT QUANTUM, for which two additional beams were commercialized for incremental capacity in maritime mobility during the First Half, bringing the total number of beams commercialized for Mobile Connectivity to three.

Second Quarter revenues stood at €30 million, up 33.8% year-on-year and by 13.3% quarter-on-quarter, reflecting the timing of the commercialization of the third beam on EUTELSAT QUANTUM for a maritime mobility client.

This positive dynamic is expected to translate into double-digit growth for the Full Year, albeit at a slower pace compared to the First Half as the comparison basis will gradually reflect some of the above-mentioned as well as other incremental contracts.

Other Revenues

In the First Half, Other Revenues amounted to -€8 million versus €4 million a year earlier. They included a €12 million negative impact from hedging operations versus a negative effect of €2 million a year earlier.


The backlog stood at €3.7 billion at 31 December 2022 versus 4.2 billion a year earlier and 4.0 billion at end June 2022. The natural erosion of the backlog in the First Half more than offset the contribution of the wholesale contract with Swisscom on EUTELSAT KONNECT as well as the new beams commercialized on EUTELSAT QUANTUM.

The backlog was equivalent to 3.2 times 2021-22 revenues, and Broadcast represented 59% 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




Note: The backlog represents future revenues from capacity or service agreements and can include contracts for satellites under procurement. Managed services are not included in the backlog.


EBITDA stood at €419 million at 31 December 2022 compared with €436 million a year earlier, down by 3.8%. The EBITDA margin stood at 72.9% at constant currency (73.0% reported) versus 76.1% a year earlier, on the back of lower revenues, especially in the Broadcast vertical. Operating costs were €18m higher than last fiscal year reflecting higher Bad Debt, increased staff costs due to a changing revenue mix and, to a lower extent, salary inflation. They also included transaction costs incurred with Russian clients. This EBITDA margin is reflective of the progressive rebalancing of our business towards connectivity applications.

Group share of net income stood at €52 million versus €166 million a year earlier, down by 68.7% and representing a margin of 9%. This reflected:

· Lower Depreciation of -€234m versus -€243m a year earlier, due to lower in-orbit and on-ground depreciation.

· Other operating expenses of -€34m, compared to income of €84 million last year, which principally included the $125m payment related to Phase I of C-Band proceeds.

· net financial result of -€56 million versus -€35 million a year earlier, reflecting an unfavourable evolution of foreign exchange gains and losses.

· tax rate of 1% versus 24% last year. The decrease was mainly due to a lower French tax rate as well as the benefits of the specific French Satellite tax regime. Last year’s tax rate was inflated by the 30% taxation of the $125m payment related to Phase I of C-Band proceeds.

· Negative income from associates of -€39 million, reflecting the full semester contribution of the stake in OneWeb, which last year was only from September 2021 onwards5.


In H1 2022-23, net cash flow from operating activities amounted to €353 million, €10 million lower than a year earlier due principally to the decline in EBITDA, which was partially compensated by lower working capital requirement needs, thanks to strong cash collection this semester.

Cash Capex amounted to €194 million, versus €98 million last year; it reflects the phasing of satellite program delivery and launch, with four satellites launched this semester, and is not representative of the expected Full Year figure.

Interest and other fees paid net of interest received amounted to €77 million versus €70 million last year. It notably reflected capitalized interest from the credit facility drawn down for the financing of satellite programs.

Discretionary Free Cash-Flow amounted to €82 million on a reported basis, down €113 million. Adjusted Discretionary Free Cash-Flow as per the financial outlook definition6, at the guidance rate, stood at €121 million, down €111 million or 48%. It is not representative of the expected Full Year figure because of the phasing of satellite programs this semester.


At 31 December 2022, net debt stood at €2,996 million, up €182 million versus end-June. It reflected: i) the lower €82 million in Discretionary Free Cash-Flow generated in the First Half, ii) the lower dividend payment of €81 million following the payment of part of the dividend in shares under the scrip option, and iii) the outflow in respect of inorganic investments of €34m for OneWeb. Other items contributed to the increase in net debt for a net impact of €149 million, reflecting mostly the use of a debt-related finance lease for the financing of satellite programs, for €200m.

The net debt to EBITDA ratio stood at 3.55 times, compared to 3.53 times at end-December 2021 and 3.27 times at end-June 2022. As a reminder, December represents a peak in the annual leverage profile reflecting the timing of the dividend payment. It is also impacted this year by the phasing of investments.

The average cost of debt after hedging stood at 2.67% (2.5% in H1 2021-22). The weighted average maturity of the Group’s debt stood at 4.1 years, compared to 4.5 years at end-December 2021.

Liquidity remained strong, with undrawn credit lines and cash around €1.3 billion.


The Annual General Meeting of Shareholders of 10 November 2022 approved the payment of a dividend of €0.93 per share in respect of the Financial Year ended 30 June 2022, and the option for the shareholder of receiving the entire part of the dividend either in cash or in new shares of the Company (scrip dividend). The option for payment of the dividend in shares by each shareholder had to be exercised from 21 November 2022 to 9 December 2022 inclusive.

It resulted that 62% of the rights were exercised in favour of the scrip dividend. The dividend was paid on 16 December 2022 and 18,381,330 new shares were issued and listed on Euronext Paris. They carry rights to the dividend for the Financial Year starting 1st July 2022 and rank pari-passu with existing shares from the issue date. The share issue had the effect of increasing Eutelsat Communications’ share capital to 248,926,325 ordinary shares with a par value of €1 each.

The cash dividend was paid on 16 December 2022, for a total of €81 million.


First Half revenues were within the range of our objectives for FY 2022-23.

Looking ahead, the impact of sanctions against certain Russian and Iranian channels will principally play out in the Second Half. This, combined with the anticipated non-renewal of Broadcast contracts in the MENA region, should lead to a slight deterioration in Broadcast revenues compared with the First-Half rate. Government Services revenues will be negatively impacted by lower renewal rates with the US Department of Defence, in a specific US geopolitical context. On the other hand, Mobility will continue to see double-digit growth, on the back of strong commercial traction, while the next step change for Fixed Broadband will be the entry into service of KONNECT VHTS by the second half of 2023 (calendar).

As a consequence, all financial objectives for FY 2022-23 and beyond are confirmed as follows:

· Revenues from the five Operating Verticals for FY 2022-23 expected between 1,135-1,165 million euros (based on a EUR/USD rate of 1.00).

· Cash Capex7 not exceeding €400 million per annum for each of the next two fiscal years (FY 2022-23 / FY 2023-24).

· Adjusted Discretionary Free Cash Flow expected at an average of €420 million per year at a €/$ rate of 1.00 for FY 2022-23 and FY 2023-24. This is equivalent to a cumulative Adjusted DFCF generation of €1,361 million over three fiscal years at a 1.00 €/$ rate (FY 2021-22, FY 2022-23, and FY 2023-24). NB/ Adjusted DFCF objectives exclude future payments related to the exclusive commercial partnership with OneWeb.

· Commitment to a sound financial structure and continue to target a medium-term net debt / EBITDA ratio of around 3x.

This outlook is based on the revised nominal deployment plan outlined in the 2022-2023 Half-Year Financial Report and the corresponding results presentation. It assumes no further material deterioration of revenues generated from Russian customers. It excludes the impact of the contemplated combination with OneWeb.

The next step change in the revenue trend will be the entry into service in calendar H2 2023 of new in-orbit assets with secured pre-commitments, in the Mobility, Government and Broadband applications, underpinning our expected return to growth in FY 2023-24.



OneWeb continues to see positive commercial momentum, with a secured backlog of $0.8bn8 at end-December 2022, up €200m vs. October 2022’s Strategic Update, on the back of key contracts won, namely with Airtel in Africa and Galaxy in Canada. Revenues are on track to reach the $50m objective by end-June 2023.

Eslewhere, the company has launched three batches of satellites since October, meaning c.85% of the constellation is now in service, on track to be fully operational by January 2024.


Following the issuance by the employee representative bodies of its opinion on the proposed combination between Eutelsat Communications and OneWeb announced on 26 July 2022, the Board of Directors of Eutelsat Communications approved the transaction. Consequently, Eutelsat and the main shareholders of OneWeb (Bharti, the UK Government, Softbank, and Hanwha) signed the final combination agreement on 14 November 2022.

Completion of the transaction remains subject to the customary conditions precedent, in particular the approval by the relevant regulatory authorities. Given the currently expected timetable for review by these authorities, the Extraordinary General Meeting of Eutelsat shareholders to approve the transaction is now expected to be held in the second or third quarter of calendar 2023.


Appointment of Christophe Caudrelier as Chief Financial Officer

Christophe Caudrelier was appointed Chief Financial Officer. Christophe Caudrelier brings a wealth of experience as CFO from his 30-year career in global industries where operational excellence and long-term investments are key to successfully addressing the evolving customer expectations.

Annual General Meeting

The Ordinary and Extraordinary Annual General Meeting of Shareholders of Eutelsat Communications was held on 10 November 2022 in Paris. All the resolutions submitted were approved. They included notably:

· Approval of the accounts;

· Ratification of the appointment of Mrs. Eva Berneke as Director;

· Appointment of Mrs. Fleur Pellerin as Director;

· Appointment of CMA-CGM as Director. CMA-CGM will be represented by Mr. Michel Sirat;

· Renewal of the mandate of Bpifrance Participations as Director. Bpifrance Participations will be represented by Mr. Samuel Dalens;

· Compensation of corporate officers and compensation policy.

The Board remains composed of 10 members, 50% of whom are women and 70% of whom are independent.

Corporate Social Responsibility

On November 1, 2022, a specifically dedicated ESG department was created, headed by a newly appointed ESG Director reporting to the Strategy and Resources Department, reflecting the place of ESG at the core of the Group’s strategy.

The sustainable use of space is one of the core tenets of Eutelsat’s ESG strategy and as a leading actor in the "Net Zero Space" initiative, Eutelsat is committed to the sustainable use of space by 2030. Upholding this commitment, Eutelsat was a signatory of ESA's "Joint Statement for a responsible space sector" on 21st November 2022.


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