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Daily news   |
SES Full Year
2023 Results
Execution against 2023 targets and strengthened
financial position with C-band. February 29, 2024 SES S.A. announces
financial results for the twelve months ended 31
December 2023. ·
Revenue of €2,030 million
above Full Year 2023 financial outlook ·
Networks (+6.1% YOY(1))
driving group revenue growth (+0.8%YOY(1))
with Video (-4.4% YOY(1)) ·
Adjusted EBITDA(2) of
€1,025 million impacted by unplanned expense in Q4
2023 ·
$3 billion U.S. C-band
Accelerated Relocation Payment received, lowering
net leverage ratio from 3.5 times to 1.5 times(3) ·
€1 billion of debt repayments
planned, including €550 million already repaid in
January 2024 ·
Solid Adjusted Free Cash Flow
of €431 million during 2023 ·
FY 2023 dividend of €0.50 per
A-share(4) to
be paid in April 2024, complemented by ongoing €150
million share buyback ·
From FY 2024 onwards SES will
move to semi-annual dividend payments, aligning to
operational cash flows ·
Rewarding shareholders with
additional interim dividend of €0.25 per A-share in
October 2024 and, starting in 2025, payment of at
least €0.25 per A-share in both April(4) and
October ·
First 6 O3b mPOWER satellites
launched with start of commercial services on track
for early Q2 2024 ·
Discussions initiated with
insurers on claim for O3b mPOWER (satellites 1-4) of
$472 million ·
Full Year 2024 financial
outlook(5) expects
revenue of €1,940-€2,000 million and Adjusted EBITDA(1) of
€950-€1,000 million Adel Al-Saleh, CEO of
SES, commented: “It’s an exciting
time to be joining SES and an honour to lead this
established, world-class operator on the next phase
of the journey. The 2023 results demonstrate the
strong fundamentals of our business and attraction
of our multi-orbit offering to a customer base of
world-leading organisations, governments, and
institutions. We delivered on all the
financial objectives for 2023 including exceeding
revenue expectations, secured €1.5 billion of new
business and renewals across Networks and Video, and
launched the first 6 O3b mPOWER satellites which
will bring high-performance connectivity services to
committed and prospective customers from early Q2
2024. With the hard work of
C-band clearing in the U.S. behind us and cash
proceeds received, we have strengthened our
industry-leading investment grade balance sheet and
unlocked important financial flexibility which
creates the opportunity to expand our capabilities,
enhance commercial offering, drive free cash flow,
and deliver returns to our shareholders. While the competitive
landscape in which we operate is evolving rapidly,
SES is well positioned to succeed and grow as we
continue to deliver differentiated and compelling
solutions to our customers, underpinned by
next-level execution and rigorous financial
discipline.”
________________________ 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.
Networks revenue of
€1,062 million increased 6.1% year-on-year driven by
growth in Mobility (+11.5%), notably from expansion
of services to cruise lines, and Government (+6.1%)
which delivered higher revenue from both U.S.
Government and Global Government customers. Fixed
Data revenue (+0.8% year-on-year) included periodic
revenue of €7 million in Q1 2023, compared with €4
million in Q4 2022. Video revenue of €967
million represented a reduction of 4.4%, compared
with 2022. Excluding €10 million of periodic revenue
recognised in Q1 2022, Video was 3.5% lower
year-on-year comprising lower revenue in mature
European and North American markets, stability in
international revenue, and continued expansion of
the Sports & Events business. Adjusted EBITDA of €1,025
million represented an Adjusted EBITDA margin of 50%
(2022: 54% on a like for like basis). Q4 2023
Adjusted EBITDA included an expense which was
unplanned in the 2023 financial outlook. Adjusted EBITDA excludes
significant special items of €2,657 million (2022:
€137 million), comprising net U.S. C-band income of
€2,697 million (2022: net income of €154 million)
less other significant special items of €40 million
(2022: €17 million expense) primarily related to
restructuring expenses. Higher tax expense and
lower net foreign exchange (FX) gains contributed to
Adjusted Net Profit of €215 million. Excluding tax
and FX, profitability was stable year-on-year with
lower depreciation and net interest expense
(including interest capitalised) offsetting lower
Adjusted EBITDA compared with 2022. Adjusted Net Profit
excludes the significant special items highlighted
above, non-cash impairment charges of €3,676
million, and related net tax of €101 million
associated with all significant special items
(including U.S. C-band). A non-cash impairment of
€1,553 million of intangible assets was triggered by
the recognition of the income from the Phase II U.S.
C-band Accelerated Relocation Payment (ARP) and
reported in Q3 2023. An additional non-cash
impairment of €2,123 million has been recorded
during Q4 2023 primarily impacting intangible assets
and the initial O3b mPOWER satellites from the
impact of lower life and capacity (as noted in the
Q3 2023 results). Adjusted Free Cash Flow
(FCF) (see page 6) was a net inflow of €431 million
(2022: €181 million net outflow) including lower
year-on-year investing activities and interest paid
(net of interest received), compared with 2022. Adjusted Net Debt
(including 100% of €550 million and 50% of €625
million of hybrid bonds as debt) on 31 December 2023
was €1,565 million and represented an Adjusted Net
Debt to Adjusted EBITDA ratio of 1.5 times, compared
with 3.5 times on 31 December 2022, including U.S.
C-band ARP received in October 2023. Additionally,
the total amount of remaining U.S. C-band clearing
cost reimbursements expected to be received in
future is now approximately $450 million. In January 2024, the €550
million hybrid bond was called and repaid from
existing cash resources. Additionally, upcoming debt
maturities of around €450 million are expected to be
repaid using existing cash resources, further
reducing gross debt, and delivering annual cash
savings of more than €40 million (including the
coupon on the €550 million hybrid bond). Contract backlog on 31
December 2023 was €4.3 billion (€5.2 billion gross
backlog including backlog with contractual break
clauses). This included over $850 million of fully
protected contract backlog ($1 billion gross
backlog) for SES-17 and O3b mPOWER combined. The Board of Directors is
proposing a Full Year 2023 dividend of €0.50 per
A-share (€0.20 per B-share), consistent with the
stable to progressive dividend policy, to be paid on
18 April 2024 subject to shareholders’ approval at
the Annual General Meeting on 4 April 2024. For the Full Year 2024
dividend, SES intends to move to a semi-annual
distribution with an interim dividend of €0.25 per
A-share (€0.10 per B-share) to be paid in October
2024 and final dividend, subject to shareholder
approval, of at least €0.25 per A-share (€0.10 per
B-share) to be paid in April 2025. The share buyback
programme of up to €150 million was started in
November 2023 and is being executed under the
authorisation given by the Annual General Meeting of
shareholders held on 6 April 2023. At 31 December
2023, 4 million A-shares had been purchased at an
average price of approximately €5.50 per A-share.
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. For Full Year 2024, group
revenue and Adjusted EBITDA (assuming an FX rate of
€1=$1.09, nominal satellite health, and nominal
launch schedule) are expected to be in the range of
€1,940-2,000 million and €950-1,000 million
respectively, with growth in Networks revenue
expected to mostly offset lower year-on-year Video
revenue. 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
expected to be in the range of €500-550 million in
2024 with an average annual capital expenditure of
approximately €350 million for the period 2025-2028. Operational
performance REVENUE BY BUSINESS
UNIT
Recent and future
satellite launches
CONSOLIDATED INCOME
STATEMENT
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CASH FLOWS
SUPPLEMENTARY
INFORMATION QUARTERLY INCOME
STATEMENT (AS REPORTED)
LIKE-FOR-LIKE REVENUE
BY BUSINESS UNIT (Pro forma assuming
full contribution from the acquisition of DRS Global
Enterprise Solutions from 1 January 2022)
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