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Eutelsat Group Trading Update

January 29, 2024

 Following the merger with OneWeb forming Eutelsat Group, and a review of trading for the first three months since completion of the merger, Eutelsat Group provides the following update.

The legacy Eutelsat business remains on track with expected performance and confirms a return to top line growth for FY 2023-24, mainly driven by the entry into service of satellites EUTELSAT 10B and KONNECT VHTS.

The results of the LEO activities of OneWeb, while progressing well, with 100% of the satellites in place and a backlog of $1.1bn1 at the end of the last quarter, are running behind schedule relative to the original roadmap. This reflects delays in the availability of the ground network, as well as a revenue mix more oriented than expected towards the sale of user terminals, which impacts margins. The delay in the ground network impacts revenues, especially in mobility and in certain geographies where market access is still outstanding.

The deployment of the ground network is progressing well, towards a 90% completion rate in Q2 2024. We continue to see strong momentum in the take-up of pre-signed commitments with major customers, and we believe we are on track towards our longer-term targets.

Nevertheless, this dynamic will not suffice to close the gap relative to our near-term expectations, and in consequence we are adjusting our financial objectives for FY 2023-24 as follows (at a €/$ rate of 1.00)2:

Revenues are now expected in a range of €1.25bn to €1.3bn (versus €1.32bn to €1.42bn previously).

Adjusted EBITDA is expected in a range of €650m to €680m (versus €725m to €825m previously).

After synergies, cash capex is expected to remain well contained within a €725m to €875m per annum average range over the period FY 2025 to FY 2030; Cash capex for FY 2024 is expected in a range between €600m and €650m.

We also continue to target leverage of c.3x in the medium term.

To allow for a more accurate assessment of prospects in the context of the rapid development of OneWeb’s business, financial objectives for FY 2024-25 will be reviewed and shared on the occasion of Eutelsat Group’s FY 2023-24 Results on August 2nd, 2024; previously communicated objectives for FY 2024-25 are meanwhile suspended.

Management remains confident in the prospects of OneWeb and the potential of Eutelsat Group’s unique combined GEO-LEO offer. As the constellation achieves full global operational coverage, we anticipate an acceleration in revenues and continue to target double-digit CAGR in revenues and Adjusted EBITDA between FY 2024 and FY 2028.

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