|
Daily news
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SES YTD 2023
Results
October 31, 2023
SES S.A. announces
financial results for the nine and three months
ended 30 September 2023 and update on O3b mPOWER.
Key YTD Financial
Highlights:
·
Revenue of €1,494 million
(+0.2% YOY(1)),
including €507 million in Q3 2023 (+3.1% YOY(2))
·
Networks +5.0% YOY(2) with
Mobility, Government, and Fixed Data growth; Video
-3.2% YOY(2,2) with
€445 million of contracts signed
·
Adjusted EBITDA(3) of
€792 million (-4.5% YOY as reported) representing a
margin of 53%
·
2023 financial outlook(1) re-affirmed
(Revenue: €1,950-2,000 million; Adjusted EBITDA:
€1,010-1,050 million)
·
U.S. C-band accelerated
relocation payment ($3 billion pre-tax) fully
received in October 2023
·
Pro forma Adjusted Net Debt
to Adjusted EBITDA ratio of around 1.5 times(4) underpins
strong balance sheet
O3b mPOWER update:
·
Launch of satellites 5&6
planned in early November 2023 and commercial
service expected to start from early Q2 2024
·
In light of an increased
number of power module switch offs over the past few
months, mitigations to be put in place for initial
satellites
·
Current O3b mPOWER customers
are expected be supported, as well as future
customers and market growth
·
Plan to upgrade satellites
7-11 and add 2 further satellites (12-13) within
SES’s existing committed Capital Expenditure
envelope
·
Expected impact of O3b mPOWER
delay in the order of mid-single digit percentage(5) lower
in terms of 2024 revenue and Adjusted EBITDA before
potential mitigations, including optimised use of
existing MEO and GEO fleet, and additional
programmes in progress
Other Highlights:
·
€150 million share buyback
(announced 3 August 2023) to start in November 2023
·
SES plans to exercise the
call for €550 million hybrid (perpetual) bond in
January 2024
·
Adel Al-Saleh appointed as
CEO, effective February 2024, with proven track
record of value creation in dynamic markets
Ruy Pinto, CEO of SES,
commented: “We are pleased with a
solid year to date financial performance and remain
fully on track to deliver on our 2023 financial
outlook. We achieved year-on-year growth in all 3 of
our main Networks segments and secured important
Video renewals which underpin the long-term cash
generation and value of our broadcast business.
Solid EBITDA performance underscores our focus on
managing controllable costs across the business.
I am delighted to confirm
that we have now collected the full $3 billion
(pre-tax) in accelerated relocation payments from
Phase II U.S. C-band clearing. With the clearing
completed ahead of schedule, we have fully delivered
on the objectives of enabling accelerated deployment
of 5G services in the U.S., protecting the critical
broadcast services delivered by our customers, and
realising significant value creation for SES.
We have identified the
causes of the power module issues with the initial 4
satellites in orbit and have now put in place a plan
to address those issues. With this plan in place, we
now expect the launch of the next two O3b mPOWER
satellites in early November and can look forward to
deploying customers and beginning commercial
services from early Q2 2024.”
_____________________________________________
|
1) At constant
FX (comparative figures restated to
neutralise currency variations) and "like
for like” (assumes the acquisition of DRS
Global Enterprise Solutions on 31 December
2021, instead of actual acquisition date of
1 August 2022, see page 5)
|
2) Excluding
periodic revenue (YTD 2023: nil; YTD 2022:
€10 million). Including periodic revenue,
Video was -4.3% lower YOY at constant FX
|
3) Excluding
operating expenses/income recognised in
relation to U.S. C-band repurposing and
other significant special items (disclosed
separately)
|
4) Based on
pro forma Adjusted Net Debt including U.S.
C-band accelerated relocation payment (net
of tax), remaining U.S. C-band
reimbursements expected to be received, €150
million share buyback programme, and calling
of €550 million hybrid bond (treated as 50%
debt and 50% equity)
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5) Financial
outlook assumes a €/$ FX rate of €1 = $1.09,
nominal satellite health, and nominal launch
schedule
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Update on O3b mPOWER
SES confirms the planned
launch of O3b mPOWER satellites 5 and 6 in early
November 2023, from which commercial services are
expected to begin from early Q2 2024.
Over the past few months,
an increased number of sporadic power module switch
offs have been observed during O3b mPOWER operations
in space, including a few non-recoverable events.
After a comprehensive investigation where the causes
were identified by Boeing and SES, mitigations for
these events will be put in place for the initial
satellites that include updated operational
procedures and leveraging elements of the
constellation in a resilient configuration, which
will enable the expected high-performance services
to customers.
With the operations of
this initial O3b mPOWER constellation, in
combination with the existing O3b MEO constellation,
SES expects it can support its currently signed O3b
mPOWER customers, as well as future customers and
market growth.
It has been determined
that the anticipated operational life and available
capacity of the initial O3b mPOWER satellites will
be significantly lower than previously expected. SES
has secured firm commitments from Boeing and both
companies are closely collaborating to deliver the
full lifecycle capabilities of the constellation.
SES and Boeing plan to upgrade 5 of the remaining
satellites (7-11) already under manufacture and add
2 additional satellites into the constellation. The
additional investment associated with this plan is
expected to be fully covered within SES’s existing
committed CapEx envelope, including supplier
concessions.
SES expects the impact of
the O3b mPOWER delay (from end-2023 previously to
early Q2 2024) to be in the order of mid-single
digit percentage (assuming a constant FX rate,
nominal satellite health, and nominal launch
schedule) lower in terms of 2024 revenue and
Adjusted EBITDA, before any potential mitigations,
such as leveraging SES’s satellite fleet with its
existing MEO and GEO satellites, and/or additional
programmes in progress.
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.
€ million
|
YTD 2023
|
YTD 2022
|
∆ as reported
|
∆ at constant
FX
and like for
like(1)
|
Average €/$ FX
rate
|
1.08
|
1.07
|
|
|
Revenue
|
1,494
|
1,400
|
+6.8%
|
+0.2%
|
Adjusted EBITDA
|
792
|
829
|
-4.5%
|
-5.2%
|
Adjusted Net
Profit
|
180
|
277
|
-35.0%
|
n/a
|
Adjusted Net Debt
/ Adjusted EBITDA
|
3.5x
|
4.0x
|
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”
assumes the acquisition of DRS Global
Enterprise Solutions on 31 December 2021,
instead of actual acquisition date of 1
August 2022.
|
Networks revenue of €767
million increased 5.0% year-on-year driven by growth
in Mobility (+9.4%) Government (+4.2%) and Fixed
Data (+2.3%) which included periodic revenue of €7
million in Q1 2023.
Video revenue of €727
million represented a reduction of 4.3%, compared
with YTD 2022. Excluding €10 million of periodic
revenue which was recognised in Q1 2022, Video was
3.2% lower year-on-year.
Adjusted EBITDA of €792
million represented an Adjusted EBITDA margin of 53%
(YTD 2022: 59% and 56% on a like for like basis).
Adjusted EBITDA excludes
significant special items of €2,678 million (YTD
2022: €29 million), mainly comprising net U.S.
C-band income of €2,701 million (YTD 2022 net
expense: €18 million) and other significant special
items of €23 million (YTD 2022: €11 million) related
to M&A costs and restructuring expenses.
Adjusted Net Profit of
€180 million included a net foreign exchange (FX)
gain of €17 million (YTD 2022: gain of €87 million),
higher year-on-year capitalised interest, and lower
year-on-year recurring income tax expense.
Adjusted Net Profit
excludes the significant special items highlighted
above, a non-cash impairment of €1,553 million
triggered by the recognition of the income from the
Phase II U.S. C-band accelerated relocation payment,
and related net tax expense of €443 million (YTD
2022: €26 million expense).
At 30 September 2023,
Adjusted Net Debt (including 50% of the €1,175
million of hybrid bonds as debt) was €3,704 million
and represented an Adjusted Net Debt to Adjusted
EBITDA ratio of 3.5 times which is unchanged
compared with 31 December 2022.
Adjusted Net Debt does
not yet include cash of $2,991 million (pre-tax of
18.3%) from U.S. C-band accelerated relocation
payments which were paid to SES in October 2023.
Additionally, the total amount of remaining U.S.
C-band clearing cost reimbursements expected to be
received in future now stands at $445 million.
Contract backlog at 30
September 2023 was €4.7 billion (€5.7 billion gross
backlog including backlog with contractual break
clauses). This included $830 million of fully
protected contract backlog ($1,030 million gross
backlog) for SES-17 and O3b mPOWER combined.
2023 group revenue and
Adjusted EBITDA outlook (assuming an FX rate of
€1=$1.09, nominal satellite health, and nominal
launch schedule) is 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=$1.09) is
also unchanged and expected to be around €550
million in 2023.
The share buyback
programme of up to €150 million (announced 3 August
2023) is intended to start in November 2023 and
executed under the authorisation given by the Annual
General Meeting of shareholders held on 6 April
2023. Under the authorisation, SES can purchase up
to 20 million A-shares and up to 10 million B-shares
in equal proportion to maintain the ratio of two
A-shares to one B-share, as required by the Articles
of Association. The aggregate value of the programme
shall not exceed €150 million, and the shares
acquired are intended to be cancelled, reducing the
total number of voting and economic shares in issue.
Operational
performance
REVENUE BY BUSINESS
UNIT
2023
|
Revenue (€
million) as reported
|
Like for like(1) change
(YOY) at constant FX
|
|
Q1
|
Q2
|
Q3
|
YTD
|
Q1
|
Q2
|
Q3
|
YTD
|
Average €/$ FX
rate
|
1.07
|
1.08
|
1.09
|
1.08
|
|
|
|
|
Video
|
242
|
244
|
241
|
727
|
-5.0% / -8.3%(2)
|
-2.0%
|
-2.5%
|
-3.2% / -4.3%(2)
|
|
|
|
|
|
|
|
|
|
Networks
|
248
|
252
|
267
|
767
|
+0.1% / +2.9%(3)
|
+3.4%
|
+8.8%
|
+4.1% / +5.0%(3)
|
Government
|
120
|
117
|
129
|
366
|
-0.6%
|
-0.9%
|
+14.7%
|
+4.2%
|
Fixed Data
|
60(3)
|
65
|
69
|
194
|
-1.6%(3)
|
+1.9%
|
+6.3%
|
+2.3%(3)
|
Mobility
|
68
|
70
|
69
|
207
|
+14.4%
|
+13.1%
|
+1.5%
|
+9.4%
|
Group Total
|
490
|
497
|
507
|
1,494
|
-3.0%
|
+0.7%
|
+3.1%
|
+0.2%
|
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).
|
Recent and future
satellite launches
Satellite
|
Region
|
Application
|
Launch Date
|
SES-18 &
SES-19
|
North America
|
Video (U.S.
C-band accelerated clearing)
|
Launched
|
O3b mPOWER
(satellites 3-4)
|
Global
|
Fixed Data,
Mobility, Government
|
Launched
|
O3b mPOWER
(satellites 5-6)
|
Global
|
Fixed Data,
Mobility, Government
|
Q4 2023
|
O3b mPOWER
(satellites 7-8)
|
Global
|
Fixed Data,
Mobility, Government
|
H2 2024
|
ASTRA 1P
|
Europe
|
Video
|
H2 2024
|
ASTRA 1Q
|
Europe
|
Video, Fixed
Data, Mobility, Government
|
2025
|
SES-26
|
Africa, Asia,
Europe, Middle East
|
Video, Fixed
Data, Mobility, Government
|
2025
|
EAGLE-1
|
Europe
|
Government
|
2025
|
O3b mPOWER
(satellites 9-11)
|
Global
|
Fixed Data,
Mobility, Government
|
2025
|
O3b mPOWER
(satellites 12-13)
|
Global
|
Fixed Data,
Mobility, Government
|
2026
|
Final launch
dates are subject to confirmation by launch
providers
|
CONSOLIDATED INCOME
STATEMENT
€ million
|
YTD 2023
|
YTD 2022
|
Average €/$ FX
rate
|
1.08
|
1.07
|
Revenue
|
1,494
|
1,400
|
U.S. C-band
repurposing income
|
2,718
|
6
|
Operating
expenses
|
(742)
|
(606)
|
EBITDA
|
3,470
|
800
|
Depreciation
expense
|
(447)
|
(454)
|
Amortisation
expense
|
(67)
|
(40)
|
Non-cash
impairment
|
(1,553)
|
(24)
|
Operating
profit
|
1,403
|
282
|
Net financing
costs
|
(49)
|
(6)
|
Profit before
tax
|
1,354
|
276
|
Income tax
expense
|
(492)
|
(78)
|
Non-controlling
interests
|
-
|
-
|
Net profit
attributable to owners of the parent
|
862
|
198
|
|
|
|
Basic and
diluted earnings per A-share (in €)(1)
|
1.90
|
0.39
|
Basic and diluted
earnings per B-share (in €)(1)
|
0.76
|
0.16
|
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
|
2023
|
2022
|
Adjusted
EBITDA
|
792
|
829
|
U.S. C-band
income
|
2,718
|
6
|
U.S. C-band
operating expenses
|
(17)
|
(24)
|
Other significant
special items
|
(23)
|
(11)
|
EBITDA
|
3,470
|
800
|
|
|
|
|
|
|
|
€ million
|
2023
|
2022
|
Adjusted Net
Profit
|
180
|
277
|
U.S. C-band
income
|
2,718
|
6
|
U.S. C-band
operating expenses
|
(17)
|
(24)
|
Non-cash
impairment
|
(1,553)
|
(24)
|
Other significant
special items
|
(23)
|
(11)
|
Tax on
significant special items
|
(443)
|
(26)
|
Net profit
attributable to owners of the parent
|
862
|
198
|
SUPPLEMENTARY
INFORMATION
QUARTERLY INCOME
STATEMENT (AS REPORTED)
€ million
|
Q1 2022
|
Q2 2022
|
Q3 2022
|
Q4 2022
|
Q1 2023
|
Q2 2023
|
Q3 2023
|
Average €/$ FX
rate
|
1.12
|
1.08
|
1.02
|
1.00
|
1.07
|
1.08
|
1.08
|
Revenue
|
448
|
451
|
501
|
544
|
490
|
497
|
507
|
U.S. C-band
income
|
2
|
2
|
2
|
178
|
2
|
1
|
2,715
|
Operating
expenses
|
(184)
|
(190)
|
(232)
|
(280)
|
(240)
|
(251)
|
(251)
|
EBITDA
|
266
|
263
|
271
|
442
|
252
|
247
|
2,971
|
Depreciation
expense
|
(147)
|
(149)
|
(158)
|
(188)
|
(148)
|
(146)
|
(153)
|
Amortisation
expense
|
(12)
|
(12)
|
(16)
|
(23)
|
(17)
|
(29)
|
(21)
|
Non-cash
impairment
|
-
|
(24)
|
-
|
(373)
|
-
|
-
|
(1,553)
|
Operating
profit/ (loss)
|
107
|
78
|
97
|
(142)
|
87
|
72
|
1,244
|
Net financing
costs
|
(16)
|
(14)
|
24
|
(82)
|
(29)
|
(18)
|
(2)
|
Profit/ (loss)
before tax
|
91
|
64
|
121
|
(224)
|
58
|
54
|
1,242
|
Income tax
expense
|
(9)
|
(45)
|
(24)
|
(9)
|
(3)
|
(17)
|
(472)
|
Non-controlling
interests
|
-
|
-
|
-
|
1
|
-
|
-
|
-
|
Net profit/
(loss)
|
82
|
19
|
97
|
(232)
|
55
|
37
|
770
|
|
|
|
|
|
|
|
|
Basic
earnings/(loss) per share (in €) (1)
|
|
|
|
|
|
|
|
Class A shares
|
0.17
|
0.02
|
0.20
|
(0.55)
|
0.10
|
0.07
|
1.73
|
Class B shares
|
0.07
|
0.01
|
0.08
|
(0.22)
|
0.04
|
0.03
|
0.69
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
274
|
271
|
284
|
276
|
265
|
265
|
262
|
Adjusted
EBITDA margin
|
61%
|
60%
|
57%
|
51%
|
54%
|
53%
|
52%
|
U.S. C-band
income
|
2
|
2
|
2
|
178
|
2
|
1
|
2,715
|
U.S. C-band
operating expenses
|
(9)
|
(8)
|
(7)
|
(6)
|
(6)
|
(7)
|
(4)
|
Other significant
special items
|
(1)
|
(2)
|
(8)
|
(6)
|
(9)
|
(12)
|
(2)
|
EBITDA
|
266
|
263
|
271
|
442
|
252
|
247
|
2,971
|
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)
|
Government
|
116
|
119
|
119
|
144
|
498
|
Fixed Data
|
58
|
64
|
69
|
75(2)
|
266(2)
|
Mobility
|
57
|
62
|
73
|
68
|
260
|
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.
|
|
|
|
|