|
talksatellite EMEA |
 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daily news   |
Eutelsat Communications:
Full Year 2022-23 Results July 28, 2023 The Board of Directors of
Eutelsat Communications (ISIN: FR0010221234 /
Euronext Paris: ETL), chaired by Dominique D’Hinnin,
reviewed the financial results for the year ended 30
June 2023.
Commenting on the Full-Year,
Eva Berneke, Chief Executive Officer of Eutelsat
Communications, said: “Fiscal Year 2022-23 has
been a very solid year for Eutelsat, with revenues
at the top end of our range of expectations, a high
level of profitability and robust Free Cash Flow
Generation. From a commercial point of view we have
seen strong momentum in our Connectivity verticals,
confirming our strategy of shifting our business
model to address these new applications.
Operationally Eutelsat has proven its technological
credentials with a record level of satellite
launches and service entries. In parallel, OneWeb,
with who we are working closely to prepare our
proposed combination has seen a similar commercial
dynamic, with a 50% increase in its backlog since
October 2022. On the basis of the
performance of the past year, Eutelsat confirms its
standalone objectives for the current and outer
years, and notably the long-awaited return to
topline growth. With its industry-leading
profitability and confirmed ability to generate a
high level of Free Cash Flow, Eutelsat is in a
strong position to make the combination with OneWeb
a true success and I look forward to our joint
future with confidence.” KEY EVENTS
ANALYSIS OF REVENUES4 Note: As of June 30, 2023,
the breakdown of the Operating Verticals revenues
will evolve to better reflect the respective end
markets which they address. The new framework will
be altered from five verticals (Broadcast, Data &
Professional Video, Government Services, Fixed
Broadband and Mobile Connectivity) to four: Video, henceforth
encompassing Broadcast and professional Video, Fixed
Connectivity, encompassing Data and Fixed Broadband,
Mobile Connectivity, and Government services.
Proforma quarterly data for FY 2021-22 and FY
2022-23 is provided in the Annexes of this Press
Release.
Total revenues for FY
2022-23 stood at €1,131 million, down by 1.8% on
a reported basis and down by 5.5% like-for-like. Revenues of the five Operating
Verticals (ie, excluding ‘Other Revenues’) stood at
€1,136 million. They were down by 4.8% on a
like-for-like basis, excluding a positive currency
impact of €43 million. “Operating Verticals”
revenues as per financial objectives (at a €/$ rate
of 1.00) stood at €1,157m. Fourth Quarter revenues
stood at €286 million down 2.3% like-for-like.
Revenues of the five Operating Verticals stood at
€283 million, down 4.1% year-on-year and up 4.7%
quarter-on-quarter on a like-for-like basis. Note: Unless otherwise
stated, all variations indicated below are on a
like-for-like basis, ie, at constant currency and
perimeter. Video (62% of revenues) FY 2022-23 Video
revenues were down by 8.3% to €705 million,
reflecting the impact of the early non-renewal of a
capacity contract with Digitürk from mid-November
2022 as well as lower revenues in Europe related to
volume reductions with certain resellers. They were
also impacted by the effect of sanctions against
Russian and Iranian channels, mainly in the Second
Half. On the commercial front,
Eutelsat was selected by Orby Elevate for the
distribution of its first mainstream English
language Direct-to-Home (DTH) services in the United
States, leveraging the unparalleled coverage of
EUTELSAT WEST 117 West A over the US territory.
Eutelsat also extended its partnership with du, the
Emirates Integrated Telecommunications Company, to
upgrade its DTH services across the Middle East and
North Africa. Professional Video revenues,
which account for c.10% of the Video vertical, also
decreased, reflecting structural headwinds as well
as the seasonality of some events. Fourth Quarter revenues
stood at €170 million down by 9.7% year-on-year and
broadly stable quarter-on-quarter. Government Services (12% of
revenues) FY 2022-23 Government
Services revenues stood at €143 million, down by
7.2% year-on-year. Fourth Quarter revenues
stood at €45 million, up by 25.8% year-on-year and
by 45.0% quarter-on-quarter. This increase was
mainly due to a one-off contract of €14m with the
German space agency, DLR, whereby EUTELSAT HOTBIRD
13F provided a service from April at the
0.5°Eorbital position, prior to its commissioning at
13°E, expected in Q3 2023 (calendar). Excluding this impact, Fourth
Quarter revenues declined by 14.2% year-on-year, a
level consistent with the trend of the Third Quarter
(-13.4%), albeit representing a slightly improved
trend versus the First Half, thanks to a superior
renewal rate in the Spring 2023 US DoD campaign of
above 70%, following the 65% rate of the Fall 2022
campaign. Mobile Connectivity (10% of
revenues) FY 2022-23 Mobile
Connectivity revenues stood at €110 million,
up 26.8% year-on-year, reflecting the ongoing
positive momentum, notably in Maritime. Fourth Quarter revenues
stood at €27 million, up 20.7% year-on-year and by
2.9% quarter-on-quarter, reflecting the positive
impact of the commercialization in the First Half of
the third beam on EUTELSAT QUANTUM for a maritime
mobility customer. Fixed Connectivity (16% of
revenues) FY 2022-23 Fixed
Connectivity revenues stood at €178 million, down by
2.3% year-on-year. In Broadband, 40% of this
application, revenues were broadly stable as the
comparison basis included 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. Eutelsat completed the disposal
of its European broadband retail activities in the
wake of the success of its wholesale go-to-market
model to distribute satellite broadband capacity
over Europe. This strategy will be further supported
by the entry into service of KONNECT VHTS expected
in the second half of 2023 (calendar). In Fixed Data, 60% of this
application, improved volume trends partly offset
the negative impact of the ongoing competitive
pressure on prices. Fourth Quarter revenues
stood at €41 million. On a like-for-like basis, they
were down by 16.0% year-on-year, and by 6.9%
quarter-on-quarter, reflecting a tougher comparison
basis including a positive one-off of c. €2.5
million in the Fourth Quarter last year. Excluding
this one-off, they were broadly stable on a
sequential basis. Other Revenues Other Revenues amounted
to -€5 million versus +€3 million a year earlier.
They included a €15 million negative impact from
hedging operations versus a negative impact of €12
million a year earlier. BACKLOG
The backlog stood at €3.4
billion at 30 June 2023 versus 4.0 billion a year
earlier. The natural erosion of the backlog,
especially in the Video segment, more than offsets
the contribution of the EGNOS contract in Government
as well as other incremental contracts in Mobility. The backlog was equivalent to
3.0 times 2021-22 revenues, and Video represented
59% of the total. 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. PROFITABILITY Adjusted EBITDA stood at
€825 million at 30 June 2023 compared with €862
million a year earlier, down by 4.2%. The Adjusted EBITDA
margin stood at 72.9% at constant currency
(73.0% reported) versus 74.8% a year earlier, on the
back of lower revenues, especially in the Video
vertical. Operating costs were €16 million
higher than last fiscal year reflecting increased
staff and technical costs due to a changing revenue
mix and, to a lower extent, inflation. They also
included transaction costs incurred with Russian
clients. This Adjusted EBITDA margin is reflective
of the progressive rebalancing of our business
towards connectivity applications. Group share of net income stood
at €315 million versus €231 million a year earlier,
up by 36% and representing a margin of 28%. This
reflected:
CASH FLOW Net cash flow from operating
activities amounted to €735 million, €66 million
lower than a year earlier due to lower adjusted
EBITDA and the first instalment of $100 million of
the take-or-pay agreement signed with OneWeb,
partially compensated by lower working capital
requirement needs, namely thanks to a prepayment in
respect of the EGNOS contract of €85 million and
strong cash collection. Cash Capex amounted to
€271 million, a level broadly stable versus €280
million last year. Interest and other fees paid
net of interest received amounted to €95 million
versus €78 million last year. It notably reflected
interests from the credit facility drawn down for
the financing of satellite programs. Discretionary Free Cash-Flow amounted
to €462 million on a reported basis, up €19 million.
It excludes the first instalment of $100 million of
the take-or-pay agreement signed with OneWeb. Adjusted
Discretionary Free Cash-Flow as per the
financial outlook definition8 and at a
Euro/dollar rate of 1.00, stood at €518 million,
down €3 million or 1%, but well above our objective
of an average of €420 million per year at a €/$ rate
of 1.00 for FY 2022-23 and FY 2023-24. FINANCIAL STRUCTURE At 30 June 2023, net debt stood
at €2,766 million, down €49 million versus end of
June 2022. It reflected: i) higher reported
Discretionary Free Cash-Flow, ii) a reduced dividend
payment of €81 million following the payment of part
of the dividend in shares under the scrip option,
and iii) lower leases. These impacts were partly
compensated by the outflow in respect of inorganic
investments of €140m mainly for OneWeb as well as
the first instalment of $100 million of the
take-or-pay agreement signed with OneWeb. The net debt to Adjusted
EBITDA ratio stood at 3.35 times, compared to
3.27 times at end-June 2022 and 3.55 times at
end-December 2022. The average cost of debt after
hedging stood at 2.96% (2.6% in FY 2021-22). The
weighted average maturity of the Group’s debt
amounted to 3.6 years, compared to 4.3 years at
end-June 2022. Liquidity remained strong, with
undrawn credit lines and cash around €1.5 billion. OUTLOOK AND FINANCIAL
OBJECTIVES On a standalone basis, FY
2023-24 is expected to be the year that marks the
return to revenue growth, driven by the entry into
service of new in-orbit resources.
Cash Capex9 will not
exceed €400 million per annum for FY 2022-23 and FY
2023-24. The Group will continue to
leverage all measures to maximise cash generation
and confirms an objective of Adjusted Discretionary
Free Cash Flow expected at an average of €420
million per year at a €/$ rate of 1.00 for FY
2022-23 and FY 2023-24. This is equivalent to a
cumulative Adjusted DFCF generation of c.€1.4
billion over three fiscal years at a 1.00 €/$ rate.
It excludes future payments related to the exclusive
commercial partnership with OneWeb. On a standalone basis, the
group continues to target a medium-term net debt /
Adjusted EBITDA ratio of c.3x. With its industry-leading
profitability and confirmed ability to generate a
high level of Free Cash Flow, Eutelsat is in a
strong position to make the combination with OneWeb
a true success. Note: This outlook is based
on the revised nominal deployment plan outlined in
the 2022-2023 results presentation. It assumes no
further material deterioration of revenues generated
from Russian customers. It excludes the impact of
the contemplated combination with OneWeb. ONEWEB UPDATE OneWeb’s revenues reached the
$50 million objective at end-June 2023. For FY
2023-24, the later-than-expected availability of
terminals for key verticals will lead to a delay in
revenue recognition compared to the objective
communicated in October 2022. As a result, the
revenue and adjusted EBITDA objectives of Combined
Entity are adjusted for the current fiscal year to
reflect this short-term impact. The new objectives
are as follows (at a €/$ rate of 1.00):
OneWeb continues to enjoy
strong commercial momentum, with over +$300m of
incremental contracts signed since last October
2022, for a total backlog of $900m10.
Therefore, the trajectory for the outer years
remains unchanged, as our market expectations as
well as the strong synergy potential give us
confidence in the value-creation the Combined Entity
can generate in the long run. Likewise, this
adjustment does not alter the future group’s
capacity to cover its long-term financing needs. The Extraordinary General
Meeting to approve the combination is expected to
take place in late September 2023.
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
.jpg){kind=logo}
