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Daily news
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SES H1 2023
RESULTS
August 03, 2023
Ruy Pinto, CEO of SES,
commented: “The strong start to the
year continued into Q2 resulting in a solid H1
financial performance and confirmation of the 2023
financial outlook. Networks is growing on the back
of strong performance in Mobility and robust
outturns in Government and Fixed Data. In Video, we
have signed additional important renewals which
underpin the long-term cash fundamentals and value
of our direct-to-home neighbourhoods.
Today, we are announcing
a share buyback programme which demonstrates our
conviction in SES’s long-term fundamentals.
With O3b mPOWER expected
to be in commercial service by the end of this year,
customers will benefit from an expanded set of
capabilities for flexible, guaranteed, and
high-performance connectivity to meet requirements
in competitive, high growth segments.
In Government, the
Luxembourg Parliament recently approved funding for
an important, multi-year commitment to O3b mPOWER,
while the group of SES and other European space and
telecom players has been selected to develop a
proposal for the European Commission’s future
satellite constellation, IRIS2.
Lastly, we are delighted
to have cleared C-band ahead of schedule, after more
than 3 years of hard work, and expect to receive the
$3 billion (pre-tax) accelerated relocation payment
in Q4 2023.”
Key business and
financial highlights (at constant FX unless
explained otherwise)
SES regularly uses
Alternative Performance Measures (APM) to present
the performance of the Group and believes that these
APMs are relevant to enhance understanding of the
financial performance and financial position.
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€million
|
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H1 2023
|
|
H1 2022
|
|
∆ as reported
|
|
∆ at constant FX
and like for like(1)
|
|
Average €/$ FX
rate
|
|
1.08
|
|
1.10
|
|
|
|
|
|
Revenue
|
|
987
|
|
899
|
|
+9.8%
|
|
-1.2%
|
|
Adjusted EBITDA
|
|
530
|
|
545
|
|
-2.7%
|
|
-5.7%
|
|
Adjusted Net
Profit
|
|
116
|
|
168
|
|
-31.0%
|
|
n/a
|
|
Adjusted Net Debt
/ Adjusted EBITDA
|
|
3.6x
|
|
3.0x
|
|
n/a
|
|
n/a
|
|
“At constant
FX” refers to comparative figures restated
at the current period FX, to neutralise
currency variations. 1) “Like for like”
which refers to as if DRS Global Enterprise
Solutions had been acquired on 31 December
2021 (acquired on 1 August 2022).
|
Networks revenue of €501
million represented a growth of 3.1% compared with
H1 2022, with growth in Mobility (of +13.8%),
complemented by robust performance in Fixed Data
(+0.2%), which included periodic revenue of €7
million in Q1 2023, as well as Government (-0.7%).
Video revenue of €486
million represents a reduction of 5.2% compared with
H1 2022, or a 3.5% reduction excluding periodic
revenue of €10 million which was recognised in Q1
2022.
Adjusted EBITDA of €530
million represented an Adjusted EBITDA margin of 54%
(H1 2022: 61% and 56% on a like for like basis,
assuming DRS Global Enterprise Solutions had been
acquired on 31 December 2021).
Adjusted EBITDA excludes
significant special items of €31 million (H1 2022:
€16 million), comprising net U.S. C-band expenses of
€10 million (H1 2022: €13 million) and other
significant special items of €21 million (H1 2022:
€3 million) related to acquisition costs and
restructuring expenses.
Adjusted Net Profit of
€116 million included a net foreign exchange (FX)
loss of €2 million (H1 2022: gain of €26 million)
which was partly offset by higher year on year
reported capitalised interest and lower year-on-year
reported income tax expense. Adjusted Net Profit
excludes significant special items (highlighted
above) and their related net tax benefit of €7
million (H1 2022: €27 million).
At 30 June 2023, Adjusted
Net Debt (including 50% of the €1,175 million of
hybrid bonds as debt) was €3,932 million and
represented an Adjusted Net Debt to Adjusted EBITDA
ratio of 3.6 times, compared with 3.5 times at 31
December 2022. At 30 June 2023, the total amount of
remaining U.S. C-band clearing cost reimbursements
expected to be received in the future was
approximately $500 million.
Contract backlog at 30
June 2023 was €4.7 billion (€5.7 billion gross
backlog including backlog with contractual break
clauses).
2023 group revenue and
Adjusted EBITDA outlook (assuming an FX rate of
€1=$1.09, nominal satellite health, and nominal
launch schedule) remains on track and expected to be
between €1,950 - 2,000 million and between €1,010 -
1,050 million respectively.
Capital expenditure (net
cash absorbed by investing activities excluding
acquisitions, financial investments, U.S. C-band
repurposing, and assuming an FX rate of €1=$1.09) is
also unchanged and expected to be around €550
million in 2023.
SES is, today, announcing
a share buyback programme of up to €150 million
expected to be executed by 30 June 2024 under the
authorisation given by the Annual General Meeting of
shareholders held on 6 April 2023. SES will purchase
up to 20 million A-shares and up to 10 million
B-shares in equal proportion to maintain the ratio
of two A-shares to one B-share, as required by the
Articles of Association. The aggregate value of the
programme shall not exceed €150 million, and the
shares acquired under the programme are intended to
be cancelled to reduce the total number of voting
and economic shares.
Operational
performance
REVENUE BY BUSINESS
UNIT
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|
|
Revenue (€
million) as reported
|
|
Like for like(1) change
(YOY) at constant FX
|
|
|
|
Q1 2023
|
|
Q2 2023
|
|
H1 2023
|
|
Q1 2023
|
|
Q2 2023
|
|
H1 2023
|
|
Average €/$
FX rate
|
|
1.07
|
|
1.08
|
|
1.08
|
|
|
|
|
|
|
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Video
|
|
242
|
|
244
|
|
486
|
|
-5.0% / -8.3%(2)
|
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-2.0%
|
|
-3.5% / -5.2%(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Networks
|
|
248
|
|
252
|
|
501
|
|
+2.9%(3)
|
|
+3.4%
|
|
+3.1%(3)
|
|
Government
|
|
120
|
|
117
|
|
237
|
|
-0.6%
|
|
-0.9%
|
|
-0.7%
|
|
Fixed Data
|
|
60(3)
|
|
65
|
|
125(3)
|
|
-1.6%(3)
|
|
+1.9%
|
|
+0.2%(3)
|
|
Mobility
|
|
68
|
|
70
|
|
139
|
|
+14.4%
|
|
+13.1%
|
|
+13.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
-
|
|
1
|
|
1
|
|
n/m
|
|
n/m
|
|
n/m
|
|
Group Total
|
|
490
|
|
497
|
|
987
|
|
-3.0%
|
|
+0.7%
|
|
-1.2%
|
|
1) As if DRS
Global Enterprise Solutions had been
acquired on 31 December 2021 (acquired on 1
August 2022) – see page 5. “At constant FX”
refers to comparative figures restated at
the current period FX, to neutralise
currency variations.
2) Including periodic revenue (Q1 2023: nil;
Q1 2022: €10 million). 3) Including periodic
revenue of €7 million in Q1 2023 (Q1 2022:
nil).
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Future satellite
launches
|
Satellite
|
Region
|
Application
|
Launch Date
|
|
SES-18 &
SES-19
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North America
|
Video (US
C-band accelerated clearing)
|
Launched
|
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O3b mPOWER
(satellites 3-4)
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Global
|
Fixed Data,
Mobility, Government
|
Launched
|
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O3b mPOWER
(satellites 5-6)
|
Global
|
Fixed Data,
Mobility, Government
|
Q3 2023
|
|
O3b mPOWER
(satellites 7-8)
|
Global
|
Fixed Data,
Mobility, Government
|
H2 2023
|
|
O3b mPOWER
(satellites 9-11)
|
Global
|
Fixed Data,
Mobility, Government
|
2024
|
|
ASTRA 1P
|
Europe
|
Video
|
2024
|
|
ASTRA 1Q
|
Europe
|
Video, Fixed
Data, Mobility, Government
|
2024
|
|
SES-26
|
Africa, Asia,
Europe, Middle East
|
Video, Fixed
Data, Mobility, Government
|
2024
|
|
EAGLE-1
|
Europe
|
Government
|
2024
|
|
|
|
Final launch
dates are subject to confirmation by launch
providers
|
CONSOLIDATED INCOME
STATEMENT
|
€ million
|
|
H1 2023
|
|
H1 2022
|
|
Average €/$
FX rate
|
|
1.08
|
|
1.10
|
|
Revenue
|
|
987
|
|
899
|
|
U.S. C-band
repurposing income
|
|
3
|
|
4
|
|
Operating
expenses
|
|
(491)
|
|
(374)
|
|
EBITDA
|
|
499
|
|
529
|
|
Depreciation
expense
|
|
(294)
|
|
(296)
|
|
Impairment
expense
|
|
-
|
|
(24)
|
|
Amortisation
expense
|
|
(46)
|
|
(24)
|
|
Operating
profit
|
|
159
|
|
185
|
|
Net financing
costs
|
|
(47)
|
|
(30)
|
|
Profit before
tax
|
|
112
|
|
155
|
|
Income tax
expense
|
|
(20)
|
|
(54)
|
|
Non-controlling interests
|
|
-
|
|
-
|
|
Net profit
attributable to owners of the parent
|
|
92
|
|
101
|
|
|
|
|
|
|
|
Basic and
diluted earnings per A-share (in €)(1)
|
|
0.17
|
|
0.19
|
|
Basic and
diluted earnings per B-share (in €)(1)
|
|
0.07
|
|
0.08
|
|
|
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 assumed
coupon, net of tax, on the perpetual bonds.
|
|
€ million
|
|
H1 2023
|
|
H1 2022
|
|
Adjusted
EBITDA
|
|
530
|
|
545
|
|
U.S. C-band
reimbursement income
|
|
3
|
|
4
|
|
U.S. C-band
operating expenses
|
|
(13)
|
|
(17)
|
|
Other
significant special items
|
|
(21)
|
|
(3)
|
|
EBITDA
|
|
499
|
|
529
|
|
|
|
|
|
|
|
€ million
|
|
H1 2023
|
|
H1 2022
|
|
Adjusted Net
Profit
|
|
116
|
|
168
|
|
U.S. C-band
reimbursement income
|
|
3
|
|
4
|
|
U.S. C-band
operating expenses
|
|
(13)
|
|
(17)
|
|
Impairment
expense
|
|
-
|
|
(24)
|
|
Other
significant special items
|
|
(21)
|
|
(3)
|
|
Tax on
significant special items
|
|
7
|
|
(27)
|
|
Net profit
attributable to owners of the parent
|
|
92
|
|
101
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
|
€ million
|
|
30 June 2023
|
31 December
2022
|
|
Closing €/$
FX rate
|
|
1.09
|
1.07
|
|
Property,
plant, and equipment
|
|
3,345
|
3,630
|
|
Assets in the
course of construction
|
|
1,948
|
1,859
|
|
Intangible
assets
|
|
4,190
|
4,291
|
|
Other
financial assets
|
|
20
|
20
|
|
Trade and
other receivables(1)
|
|
109
|
111
|
|
Deferred
customer contract costs
|
|
3
|
7
|
|
Deferred tax
assets
|
|
522
|
499
|
|
Total
non-current assets
|
|
10,137
|
10,417
|
|
Inventories
|
|
39
|
34
|
|
Trade and
other receivables(1)
|
|
849
|
1,033
|
|
Deferred
customer contract costs
|
|
2
|
4
|
|
Prepayments
|
|
51
|
47
|
|
Income tax
receivable
|
|
32
|
25
|
|
Cash and cash
equivalents (A)
|
|
333
|
1,047
|
|
Total current
assets
|
|
1,306
|
2,190
|
|
Total assets
|
|
11,443
|
12,607
|
|
|
|
|
|
|
Equity
attributable to the owners of the parent
|
|
5,363
|
5,596
|
|
Non-controlling interests
|
|
57
|
62
|
|
Total equity
|
|
5,420
|
5,658
|
|
|
|
|
|
|
Borrowings (B)
|
|
3,460
|
3,629
|
|
Provisions
|
|
7
|
7
|
|
Deferred
income
|
|
330
|
359
|
|
Deferred tax
liabilities
|
|
427
|
434
|
|
Other
long-term liabilities
|
|
83
|
107
|
|
Lease
liabilities
|
|
31
|
30
|
|
Fixed assets
suppliers
|
|
375
|
740
|
|
Total
non-current liabilities
|
|
4,713
|
5,306
|
|
Borrowings (C)
|
|
217
|
719
|
|
Provisions
|
|
80
|
67
|
|
Deferred
income
|
|
191
|
189
|
|
Trade and
other payables
|
|
303
|
367
|
|
Lease
liabilities
|
|
21
|
15
|
|
Fixed assets
suppliers
|
|
479
|
264
|
|
Income tax
liabilities
|
|
19
|
22
|
|
Total current
liabilities
|
|
1,310
|
1,643
|
|
Total
liabilities
|
|
6,023
|
6,949
|
|
|
|
|
|
|
Total equity
and liabilities
|
|
11,443
|
12,607
|
|
Reported Net
Debt (B + C – A)
|
|
3,344
|
3,301
|
|
1) Trade and
other receivables (current and non-current)
include €385 million related to U.S. C-band
repurposing (31 December 2022: €480
million).
|
CONSOLIDATED STATEMENT
OF CASH FLOWS
|
€ million
|
|
H1 2023
|
H1 2022
|
|
Profit before
tax
|
|
112
|
155
|
|
Taxes paid
during the year
|
|
(38)
|
(169)
|
|
Adjustment for
non-cash items
|
|
367
|
371
|
|
Changes in
working capital
|
|
26
|
423
|
|
Net cash
generated by operating activities
|
|
467
|
780
|
|
|
|
|
|
Payments for
purchases of intangible assets
|
|
(13)
|
(25)
|
|
Payments for
purchases of tangible assets(1)
|
|
(209)
|
(555)
|
|
Other
investing activities
|
|
(5)
|
(1)
|
|
Net cash
absorbed by investing activities
|
|
(227)
|
(581)
|
|
|
|
|
|
Proceeds from
borrowings
|
|
50
|
745
|
|
Repayment of
borrowings
|
|
(698)
|
(49)
|
|
Coupon paid on
perpetual bond
|
|
(31)
|
(31)
|
|
Dividends paid
on ordinary shares(2)
|
|
(220)
|
(219)
|
|
Interest paid
on borrowings
|
|
(67)
|
(48)
|
|
Proceeds from
treasury shares sold and exercise of stock
options
|
|
3
|
4
|
|
Lease payments
|
|
(10)
|
(9)
|
|
Net cash
generated/(absorbed) by financing activities
|
|
(973)
|
393
|
|
|
|
|
|
Net foreign
exchange movements
|
|
19
|
28
|
|
Net increase
in cash and cash equivalents
|
|
(714)
|
620
|
|
Cash and cash
equivalents at beginning of the year
|
|
1,047
|
1,049
|
|
Cash and cash
equivalents at end of the year
|
|
333
|
1,669
|
|
1) Including
net reimbursements of €87 million related to
U.S. C-band repurposing (H1 2022: net
payments of €319 million).
2) Net of dividends received on treasury
shares of €3 million (H1 2022: €4 million)
|
|
€ million
|
|
H1 2023
|
|
H1 2022
|
|
Net cash
generated by operating activities
|
|
467
|
|
780
|
|
Net cash
absorbed by investing activities
|
|
(227)
|
|
(581)
|
|
Free cash flow
before financing activities
|
|
240
|
|
199
|
|
Interest paid
on borrowings
|
|
(67)
|
|
(48)
|
|
Lease payments
|
|
(10)
|
|
(9)
|
|
Free cash flow
before equity distributions and treasury
activities
|
|
163
|
|
142
|
|
|
|
|
|
SUPPLEMENTARY
INFORMATION
QUARTERLY INCOME
STATEMENT (AS REPORTED)
|
€ million
|
|
Q1 2022
|
|
Q2 2022
|
|
Q3 2022
|
|
Q4 2022
|
|
Q1 2023
|
|
Q2 2023
|
|
Average €/$
FX rate
|
|
1.12
|
|
1.08
|
|
1.02
|
|
1.00
|
|
1.07
|
|
1.08
|
|
Revenue
|
|
448
|
|
451
|
|
501
|
|
544
|
|
490
|
|
497
|
|
U.S. C-band
repurposing income
|
|
2
|
|
2
|
|
2
|
|
178
|
|
2
|
|
1
|
|
Operating
expenses
|
|
(184)
|
|
(190)
|
|
(232)
|
|
(280)
|
|
(240)
|
|
(251)
|
|
EBITDA
|
|
266
|
|
263
|
|
271
|
|
442
|
|
252
|
|
247
|
|
Depreciation
expense
|
|
(147)
|
|
(149)
|
|
(158)
|
|
(188)
|
|
(148)
|
|
(146)
|
|
Amortisation
expense
|
|
(12)
|
|
(12)
|
|
(16)
|
|
(23)
|
|
(17)
|
|
(29)
|
|
Impairment
expense
|
|
-
|
|
(24)
|
|
-
|
|
(373)
|
|
-
|
|
-
|
|
Operating
profit
|
|
107
|
|
78
|
|
97
|
|
(142)
|
|
87
|
|
72
|
|
Net financing
costs
|
|
(16)
|
|
(14)
|
|
24
|
|
(82)
|
|
(29)
|
|
(18)
|
|
Profit before
tax
|
|
91
|
|
64
|
|
121
|
|
(224)
|
|
58
|
|
54
|
|
Income tax
benefit/(expense)
|
|
(9)
|
|
(45)
|
|
(24)
|
|
(9)
|
|
(3)
|
|
(17)
|
|
Non-controlling interests
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
|
Net
(Loss)/Profit
|
|
82
|
|
19
|
|
97
|
|
(232)
|
|
55
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(loss)/earnings per share
(in €)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A shares
|
|
0.17
|
|
0.02
|
|
0.20
|
|
(0.55)
|
|
0.10
|
|
0.07
|
|
Class B shares
|
|
0.07
|
|
0.01
|
|
0.08
|
|
(0.22)
|
|
0.04
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
274
|
|
271
|
|
284
|
|
276
|
|
265
|
|
265
|
|
Adjusted
EBITDA margin
|
|
61%
|
|
60%
|
|
57%
|
|
51%
|
|
54%
|
|
53%
|
|
U.S. C-band
repurposing income
|
|
2
|
|
2
|
|
2
|
|
178
|
|
2
|
|
1
|
|
U.S. C-band
operating expenses
|
|
(9)
|
|
(8)
|
|
(7)
|
|
(6)
|
|
(6)
|
|
(7)
|
|
Other
significant special items
|
|
(1)
|
|
(2)
|
|
(8)
|
|
(6)
|
|
(9)
|
|
(12)
|
|
EBITDA
|
|
266
|
|
263
|
|
271
|
|
442
|
|
252
|
|
247
|
|
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.
|
LIKE-FOR-LIKE REVENUE
BY BUSINESS UNIT
(Pro forma as if the
acquisition of DRS Global Enterprise Solutions had
been completed on 31 December 2021)
|
€ million
|
|
Q1 2022
|
|
Q2 2022
|
|
Q3 2022
|
|
Q4 2022
|
|
FY 2022
|
|
Average €/$
FX rate
|
|
1.12
|
|
1.08
|
|
1.02
|
|
1.00
|
|
1.06
|
|
Video
|
|
261(1)
|
|
250
|
|
252
|
|
257
|
|
1,020(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Networks
|
|
231
|
|
245
|
|
261
|
|
287(2)
|
|
1,024(2)
|
|
|
|
116
|
|
119
|
|
119
|
|
144
|
|
498
|
|
|
|
58
|
|
64
|
|
69
|
|
75(2)
|
|
266(2)
|
|
|
|
57
|
|
62
|
|
73
|
|
68
|
|
260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
Group Total
|
|
493
|
|
495
|
|
513
|
|
544
|
|
2,045
|
|
1) Included
periodic revenue of €10 million in Q1 2022.
|
|
2) Included
periodic revenue of €4 million in Q4 2022.
“Periodic” revenue separated revenues that
are not directly related to or would distort
the underlying business trends on a
quarterly basis. Periodic revenue includes:
the outright sale of transponders or
transponder equivalents; accelerated revenue
from hosted payloads during construction;
termination fees; insurance proceeds;
certain interim satellite missions; and
other such items when material.
|
|
|
|
|
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