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SES: Half Year 2019 Results

SES: Half Year 2019 Results

26.07.2019: SES S.A. announced its financial results for the six months ended 30 June 2019 with performance in line with SES’ expectations, continued growth in Networks’ revenue and financial outlook unchanged. Key financial highlights

SES S.A. announced its financial results for the six months ended 30 June 2019 with performance in line with SES’ expectations, continued growth in Networks’ revenue and financial outlook unchanged.
 
 




Key financial highlights


•    Reported revenue of EUR 961.4 million, (down 5.1% at constant FX(1))


•    Underlying revenue(2) of EUR 950.6 million; down 4.2%(1) (Video: -8.8%(1,2) and Networks +5.0%(1,2))


•    EBITDA of EUR 584.5 million representing a margin of 60.8% (H1 2018: 63.3%); 62.0% excluding restructuring charge
•    Net profit attributable to SES shareholders of EUR 169.2 million


•    Free Cash Flow before financing activities of EUR 379.8 million with investing activities 30.3% lower than H1 2018

•    Financial outlook unchanged




Change (%) EUR million          H1 2019          H1 2018          Reported          Constant FX(1)


Average EUR/USD exchange rate          1.1326          1.2127                      

Revenue          961.4          981.4          -2.0%          -5.1%

EBITDA          584.5          621.1          -5.9%          -8.4%

Operating profit          216.2          277.7          -22.1%          -23.2%

Net profit attributable to SES shareholders          169.2          227.7          -25.7%          n/a

Basic earnings per A share          EUR 0.32          EUR 0.45          -28.9%          n/a



1) Comparative figures are restated at constant FX to neutralise currency variations

2) Excluding periodic and other revenue (disclosed separately) that are not directly related to or would distort the underlying business trends





Steve Collar, President and CEO, commented:
“We’ve had a solid first six months with financial results in line with our expectations, with continued revenue growth in Networks, strong control over cost and discretionary spending and important progress towards reshaping SES with the objective of delivering exceptional services and driving customer success.



Our Networks business continued to expand on the back of another strong performance in Mobility and Government while we’ve built further commercial traction that can support our Fixed Data business. Of note in H1, we’ve added again to our market-leading position in cruise – with more ships for Genting and the announcement of premium brand Ritz-Carlton; we’ve secured Teleglobal as an anchor customer for SES-12 in Indonesia; expanded connectivity services in Colombia and Brazil; while also restoring connectivity to citizens in Papua New Guinea following a major earthquake.


With encouraging levels of demand across our Networks segments, I’m looking forward to the contribution from the additional O3b satellites, which very recently came into operation, as well as being that much closer to the launch of O3b mPOWER in 2021.



While the market environment in Video remains challenging, we’ve delivered value to customers across our core neighbourhoods and are starting to see benefits of bringing together our infrastructure and MX1 businesses into a single operational unit.



In the period, we signed further renewals in our core neighbourhoods; grew our video platforms with new customers in Ethiopia, Brazil and Ivory Coast; expanded our managed services relationship with Discovery in Germany; and MX1’s Sports & Events team were instrumental in bringing the Women’s World Cup and Eurovision Song Contest to viewers across our neighbourhoods.



Looking ahead, our priority for H2 is to deliver on our financial outlook and the revenue expansion implied. We achieved this in H2 2018 and we are on track to do so this year. We’ve now secured 90% of the expected revenue for 2019 and have good visibility of future revenue across Video and Networks.



With respect to C-Band and our ongoing market-based engagement in support of the rapid deployment of 5G services in the U.S., through the C-Band Alliance, we have made further progress this quarter. The CBA has been extremely active with all stakeholders as focus and intensity around the repurposing of spectrum gathers momentum. I believe the record clearly shows that our proposal remains the only one that appropriately balances the support to the 120 million U.S. TV and radio households with the need to quickly, efficiently and safely repurpose mid-band spectrum for 5G. I’m encouraged by the comments of the FCC Chairman who believes that there will be ‘results to show’ in the Fall.”




Key business highlights



•    Group revenue of EUR 961.4 million in H1 2019 was 5.1% lower (year-on-year) at constant FX and included periodic and other revenue of EUR 10.8 million (H1 2018: EUR 20.0 million). Underlying revenue (excluding periodic and other) was 4.2% lower (year-on-year) at constant FX to EUR 950.6 million.


•    Video underlying revenue of EUR 603.8 million in H1 2019 was 8.8% lower (year-on-year) at constant FX due to lower video distribution revenue (-8.7%), including the North American wholesale business, and lower video services (-9.4%) revenue which was mainly due to the non-renewal of low-margin ‘legacy’ services in MX1.


•    Networks’ underlying revenue grew by 5.0% (year-on-year) at constant FX to EUR 346.8 million in H1 2019. This expansion reflected the continued strong growth in the Government (+7.9%) and Mobility (+10.9%) businesses while Fixed Data was lower (-2.2%) than H1 2018.


•    EBITDA of EUR 584.5 million (down 8.4% at constant FX) represented an EBITDA margin of 60.8%, or 62.0% excluding a restructuring charge of EUR 11.4 million associated with the group’s ongoing optimisation initiatives.


•    Net profit attributable to SES shareholders was EUR 169.2 million (H1 2018: EUR 227.7 million) with the year-on-year variance reflecting the combination of lower EBTIDA and higher depreciation and amortisation expenses.


•    Free Cash Flow before financing was EUR 379.8 million, including a 30.3% (year-on-year) reduction in investing activities.


•    Net debt to EBITDA ratio (per the rating agency methodology) was 3.50 times at H1 2019 (H1 2018: 3.53 times) and is expected to be at or below 3.30 times at the end of 2019, in line with SES’ commitment to investment grade status.

 
•    SES’s fully protected contract backlog at 30 June 2019 was EUR 6.4 billion (gross backlog of EUR 7.1 billion when including backlog subject to contractual break clauses). 90% of the 2019 expected group revenue is now secured comprising over 90% of the Video and over 85% of the Networks expected revenue already contractually committed.


•    The financial outlook, as presented in February 2019, is unchanged with 2019 group revenue of EUR 1,975 - 2,040 million and 2019 group EBITDA of EUR 1,220 - 1,265 million (excluding a restructuring charge of EUR 25 - 30 million expected to be recognised in 2019).


•    Relative to H1 2019, second half revenue is expected to benefit from continued growth in Networks, notably in the Aeronautical, Maritime and Government segments, along with new services coming on-line on SES-12 and the four additional O3b satellites which recently came into operation. Growth in International and MX1 services, notably the Sports & Events business, is expected to contribute to the run rate in Video in the second half.


•    Expected capital expenditure (representing the net cash absorbed by the group’s investing activities excluding acquisitions and financial investments) also remains unchanged for the period 2019 to 2023 with EUR 450 million planned in 2019.



Board Update


Anne-Catherine Ries and Tsega Gebreyes have been appointed Vice-Chairpersons of the Board and Romain Bausch was re-elected as Chairman of the Board.



In June 2019, Paul Konsbruck and Marc Serres joined the Board, while Jean-Paul Senninger, Jean-Paul Zens and Conny Kullman retired from the Board for personal reasons. The Board now has 13 members (compared with 15 as at the end of 2018), all of which are non-executive directors.




OPERATIONAL REVIEW

REVENUE BY BUSINESS UNIT



Change (%) EUR million          H1 2019          H1 2018          Reported          Constant FX


Video          604.6          658.5          -8.2%          -9.9%
- Underlying          603.8          650.0          -7.1%          -8.8%
- Periodic          0.8          8.5          n/m          n/m

Networks          356.2          322.2          +10.6%          +4.4%
- Underlying          346.8          311.4          +11.4%          +5.0%
- Periodic          9.4          10.8          n/m          n/m

Sub-total          960.8          980.7          -2.0%          -5.1%
- Underlying          950.6          961.4          -1.1%          -4.2%
- Periodic          10.2          19.3          n/m          n/m

Other(1)          0.6          0.7          n/m          n/m


Group Total          961.4          981.4          -2.0%          -5.1%



“Underlying” revenue represents the core business of capacity sales, as well as associated services and equipment. This revenue may be impacted by changes in launch schedule and satellite health status. “Periodic” revenue separates 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 the course of construction; termination fees; insurance proceeds; certain interim satellite missions and other such items when material.



1) Other includes revenue not directly applicable to Video or Networks


H1 2019 underlying revenue of EUR 950.6 million was EUR 42.0 million (or -4.2%) lower at constant FX, compared with the prior year. Total group revenue included periodic and other revenue of EUR 10.8 million (H1 2018: EUR 20.0 million).



Q2 2019 reported revenue of EUR 480.8 million (Q2 2018: EUR 503.8 million) included EUR 4.1 million of periodic and other revenue (Q2 2018: EUR 16.9 million). Q2 2019 underlying revenue of EUR 476.7 million was 5.4% lower (at constant FX) than Q2 2018.




Video: 63% of group revenue (H1 2018: 67%)



At 30 June 2019, SES was delivering a total of 8,292 TV channels to viewers around the world. This represented an increase of 4% (year-on-year) where a reduction in North American TV channels was more than compensated by the expansion of new channels in International and Eastern European markets, as well as further High Definition adoption in Western Europe.


Overall, SES is now distributing 2,845 channels in High Definition (up 3% year-on-year) and 43 commercial Ultra High Definition channels (up 13% year-on-year). 68% of total TV channels are now broadcast in MPEG-4, or 71% also including HEVC.


 
Video underlying revenue of EUR 603.8 million was EUR 58.6 million (or 8.8%) lower at constant FX than the prior year. Total Video revenue included EUR 0.8 million of periodic revenue which was lower than the EUR 8.5 million recognised in H1 2018.




VIDEO REVENUE BY VERTICAL



Change (%) EUR million          H1 2019           H1 2018           Reported           Constant FX


Video Distribution          454.5           495.5           -8.3%           -10.0%
- Underlying          453.7           487.0           -6.8%           -8.7%
- Periodic          0.8           8.5           n/m           n/m

Video Services          150.1           163.0           -7.9%           -9.4%
- Underlying          150.1           163.0           -7.9%           -9.4%
- Periodic          --           --           n/m           n/m

Video (total)          604.6           658.5           -8.2%           -9.9%
- Underlying          603.8           650.0           -7.1%           -8.8%
- Periodic          0.8           8.5           n/m           n/m




Video Distribution


H1 2019 underlying revenue was 8.7% lower (constant FX) than the prior year.



As expected, North American revenue decreased, primarily driven by the reduction in wholesale business related to a specific satellite used by a single customer. The ongoing switch-off of Standard Definition TV channels, which had already been replaced with HD TV channels, also contributed to the lower (year-on-year) revenue development in this region.
In Europe, the effect of certain long-term renewals secured in late 2018 and the reversal of some short-term capacity contracts that ended in Q3 2018 led to lower (year-on-year) revenue.



While trading conditions remain challenging, SES is making progress in its International business with new customers signed during 2018, albeit not yet fully offsetting the impact of challenges in specific markets that was experienced in 2018.


Following the outcome of the strategic review, announced in October 2018, the commercial operations of YahLive (a partnership between SES and YahSat in which SES has a 35% participation) will be fully integrated within SES Video from Q3 2019 with the focus to build on the existing commercial pipeline and drive operational efficiencies.



Q2 2019 underlying revenue of EUR 225.3 million was 9.2% lower (at constant FX) than Q2 2018.




Video Services



Underlying revenue was down (-9.4%) in H1 2019 compared with the prior year.



HD+ was stable (year-on-year) and the business secured important wins as Panasonic and Samsung both announced that their new TV sets sold in Germany will include the HD+ software, enabling consumers to access the HD+ platform without requiring a set-top box.



In MX1, the discontinuation of certain low-margin ‘legacy’ services led to lower revenue (year-on-year). This has continued to hold back the contribution from customer adoption of the MX1 360 platform and the Sports & Events business which are gaining traction.



Q2 2019 underlying revenue was EUR 75.2 million. The year-on-year comparison is affected by the additional revenue recognised in Q2 2018 in relation to the adoption of changes in IFRS 15 in the HD+ business. Excluding this impact, Video Service’s revenue development (at constant FX) was comparable to the six months reduction of 9.4%.




Networks: 37% of group revenue (H1 2018: 33%)


Underlying revenue of EUR 346.8 million was EUR 16.5 million (or 5.0%) higher at constant FX, compared with H1 2018, reflecting strong growth in Mobility and Government and robust performance in Fixed Data. There was EUR 9.4 million of periodic revenue in H1 2019 (EUR 10.8 million in H1 2018).





NETWORKS REVENUE BY VERTICAL

Change (%) EUR million          H1 2019          H1 2018          Reported          Constant FX



Government          141.9           131.0           +8.4%           +3.3%
- Underlying          139.9           123.2           +13.5%           +7.9%
- Periodic          2.0           7.8           n/m           n/m

Fixed Data          116.9           114.0           +2.7%           -3.5%
- Underlying          115.3           111.0           +4.0%           -2.2%
- Periodic          1.6           3.0           n/m           n/m

Mobility          97.4           77.2           +26.0%           +17.8%
- Underlying          91.6           77.2           +18.6%           +10.9%
- Periodic          5.8           --           n/m           n/m

Networks (total)          356.2           322.2           +10.6%           +4.4%
- Underlying          346.8           311.4           +11.4%           +5.0%
- Periodic          9.4           10.8           n/m           n/m

Government
Underlying revenue grew by 7.9% (year-on-year) in H1 2019, reflecting further growth in both the U.S. and Global Government businesses.

 


Revenue from the U.S. Government continued to grow, supported by GEO-enabled network solutions and new MEO missions, with opportunities in the second half of the year to continue to expand MEO services, enabled by the blanket purchase agreement signed in 2018.


There was strong growth across the Global Government portfolio, driven by the expansion of humanitarian and peacekeeping operations, institutional projects and the full six months’ contribution of GovSat-1 in H1 2019.
Q2 2019 underlying revenue of EUR 71.4 million was 6.3% higher (at constant FX) than Q2 2018.
Fixed Data



H1 2019 underlying revenue was down 2.2% (year-on-year) at constant FX.



Growth was reported in the Americas, and notably Latin America, supported by new and incremental services to Telcos and Mobile Networks Operators to deploy their mobile and enterprise networks and in the Energy segment especially due to new MEO services provided to leading service providers in the industry.


Lower revenue from wholesale capacity in EMEA and Asia-Pacific led to overall Fixed Data revenue being slightly lower than H1 2018 as this is yet to be offset by customer upgrades and new business that is expected to drive future growth.
Q2 2019 underlying revenue of EUR 56.6 million was 3.2% lower (at constant FX) than Q2 2018.





 
Mobility


Underlying revenue grew by 10.9% (year-on-year) at constant FX.



Aeronautical once again delivered strong growth driven by the steady increase in the fill rate of SES-15 and SES-14, meeting the strong demand for bandwidth and services from Aero Service Providers supporting North and Latin American airlines. This growth was furthered by the expansion of SES’ Ka-based aero network and the restoration of services on behalf of Intelsat as part of the restoration agreement between the two companies that was activated during Q2 2019.


In Maritime, the cruise segment continued to lead growth with the expansion of agreements with existing cruise customers and contributions from new cruise operators signed. As a result, SES is now supporting four of the top five global cruise operators, representing significant vessel expansion potential.


Q2 2019 underlying revenue of EUR 48.2 million was 12.9% higher (at constant FX) than Q2 2018.






Future satellite capacity and fleet update



At the end of February 2019, SES-12 started to operate at 95° East, co-located with SES-8, and is relying on its combination of wide-beam and HTS capacities to deliver new services over the Asia-Pacific region.




COMMITTED LAUNCH SCHEDULE


Satellite          Region          Application          Launch Date
O3b (satellites 17-20)          Global          Fixed Data, Mobility, Government          Launched (4 April 2019)


SES-17          Americas          Fixed Data, Mobility, Government          H1 2021
O3b mPOWER (satellites 1-7)          Global          Fixed Data, Mobility, Government          H1 2021




In April 2019 the final four O3b satellites (satellites 17-20) were launched, completing the first generation of SES’ successful and unique MEO constellation. The four additional satellites entered operation very recently, enhancing coverage across the globe and enabling SES Networks to provide greater service availability and reliability.
Financial Outlook Unchanged




The financial outlook assumes a EUR/USD FX rate of EUR 1 = USD 1.15, nominal launch schedule and satellite health status.


           FY 2019          FY 2020



Video revenue          EUR 1,225 - 1,255 million          EUR 1,200 - 1,250 million
Networks revenue          EUR 740 - 775 million          EUR 850 - 900 million
Other revenue          Approximately EUR 10 million          Approximately EUR 10 million
Group revenue          EUR 1,975 - 2,040 million          EUR 2,060 - 2,160 million
EBITDA          EUR 1,220 - 1,265 million(1)          EUR 1,260 - 1,340 million





1) Excluding a restructuring charge of EUR 25-30 million expected to be recognised in 2019



This financial outlook, as presented in February 2019, is unchanged. At 30 June 2019, 90% of the 2019 expected group revenue is now secured. Relative to H1 2019, second half revenue is expected to benefit from continued growth in Networks, notably in the Aeronautical, Maritime and Government segments, along with new services coming on-line on SES-12 and the four additional O3b satellites which recently came into operation. Growth in International and MX1 services, notably the Sports & Events business, is expected to contribute to the run rate in Video in the second half.



Expected capital expenditure (representing the net cash absorbed by the group’s investing activities excluding acquisitions and financial investments) for the period of 2019-2023 is consistent with SES’ previous expectations and comprises EUR 450 million in 2019, EUR 390 million in 2020, EUR 1,200 million in 2021 (principally relating to the investment in O3b mPOWER), EUR 450 million in 2022 and EUR 450 million in 2023.




FINANCIAL REVIEW  



Income Statement


REVENUE, OPERATING EXPENSES AND EBITDA



EUR million          H1 2019          H1 2018          Change          Change (%)



Revenue          961.4           981.4           -20.0           -2.0%
Revenue (constant FX)          961.4           1,012.9           -51.5           -5.1%
                                                
Operating expenses          (376.9)           (360.3)           -16.6           -4.6%
Operating expenses (constant FX)          (376.9)           (374.6)           -2.3           -0.6%
                                                

EBITDA          584.5           621.1           -36.6           -5.9%

EBITDA (constant FX)          584.5           638.3           -53.8           -8.4%





Reported revenue was EUR 20.0 million below the prior period and included the benefit of the stronger U.S. Dollar in H1 2019 compared with the same period in 2018. At constant FX, revenue decreased by EUR 51.5 million (or 5.1%) with lower Video revenue partially offset by strong growth in Networks.


Operating expenses were EUR 16.6 million higher as reported (or EUR 2.3 million higher at constant FX) and included a restructuring charge of EUR 11.4 million as part of the company’s ongoing optimisation initiatives (H1 2018: EUR 8.4 million). Excluding the restructuring charge, operating expenses were slightly favourable year on year (decrease of EUR 0.7 million).


Group EBITDA of EUR 584.5 million represented an EBITDA margin of 60.8% (H1 2018: 63.3%), or 62.0% excluding the restructuring charge noted above.





DEPRECIATION, AMORTISATION AND OPERATING PROFIT


EUR million          H1 2019          H1 2018          Change          Change (%)



Depreciation and impairment expense          (323.0)          (303.5)          -19.5          -6.4%

Amortisation expense          (45.3)          (39.9)          -5.4          -13.6%

Depreciation, impairment and amortisation expense          (368.3)          (343.4)          -24.9          -7.3%

Depreciation, impairment and amortisation expense (constant FX)          (368.3)          (356.9)          -11.4          -3.2%
                                             

Operating profit          216.2          277.7          -61.5          -22.1%

Operating profit (constant FX)          216.2          281.4          -65.2          -23.2%




Reported depreciation, impairment and amortisation expense increased by EUR 11.4 million compared with the prior period (at constant FX) primarily due to the entry into service of new satellites since 30 June 2018.



Operating profit represented an operating profit margin of 22.5% (H1 2018: 28.3%), or 23.7% excluding the restructuring charge as noted above.




PROFIT ATTRIBUTABLE TO SES SHAREHOLDERS



EUR million          H1 2019           H1 2018           Change           Change (%)



Net interest expense and other          (89.0)           (94.1)           +5.1           +5.4%
Capitalised interest          6.1           17.8           -11.7           -66.0%
Net foreign exchange gains          1.5           1.1           +0.4           +33.6%
Net financing costs          (81.4)           (75.2)           -6.2           -8.4%
Profit before tax          134.8           202.5           -67.7           -33.5%
     
                                          
Income tax (expense) / benefit          22.4           40.9           -18.5           -45.2%
Profit after tax          157.2           243.4           -86.2           -35.4%
     
                                          
Non-controlling interests          12.0           (15.7)           +27.7           n/m
Profit attributable to SES shareholders          169.2           227.7           -58.5           -25.7%
 
                                              
Coupon on hybrid (perpetual) bond, net of tax          (24.2)           (23.8)           -0.4           -1.7%
Adjusted profit attributable to SES shareholders          145.0           203.9           -58.9           -28.9%
Basic earnings per Class A share (in EUR)          0.32           0.45           -0.13           -28.9%





Net financing costs were EUR 6.2 million higher than the prior period with lower interest expenses were more than offset by lower capitalised interest, as some recent space and ground investments are now in service and ramping up.


The year-on-year comparison of income tax expense and non-controlling interests is affected by the one-off impact associated with the recognition of a deferred tax asset in H1 2018 and its corresponding impact on non-controlling interests.


Net profit attributable to SES shareholders of EUR 169.2 million (H1 2018: EUR 227.7 million) represented basic earnings per share of EUR 0.32 (H1 2018: EUR 0.45) after deducting the assumed coupon (net of tax) for the group’s hybrid (perpetual) bonds.


Cash Flow and Financing


FREE CASH FLOW BEFORE FINANCING ACTIVITIES



EUR million          H1 2019          H1 2018          Change          Change (%)


Net cash generated by operating activities          553.5          688.0          -134.5          -19.5%
Net cash absorbed by investing activities          (173.7)          (249.3)          +75.6          +30.3%

Free cash flow before financing activities          379.8          438.7          -58.9          -13.4%


Net cash generated by operating activities was lower than the prior year which benefitted from some periodic inflows in H1 2018. This was largely offset by lower net cash absorbed by investing activities of EUR 173.7 million, resulting in an overall decrease EUR 58.9 million (or -13.4%) in free cash flow before financing activities compared with the prior year. The ratio of free cash flow before financing activities to revenue was 39.5% in H1 2019 compared with 44.7% in H1 2018.






NET DEBT TO EBITDA RATIO


EUR million          30 June 2019          31 December 2018          Change          Change (%)



Borrowings(1)          3,938.3          4,384.9          +446.6          +10.2%
Cash and cash equivalents          (322.5)          (909.1)          -586.6          -64.5%
Net debt          3,615.8          3,475.8          -140.0          -4.0%
                                             
Net debt to EBITDA (rating agency)(2)          3.50 times          3.29 times                      
Weighted average interest cost(3)          3.63%          3.62%                      
Weighted average debt maturity          7.3 years          7.0 years      


                
1) As presented using IFRS recognition principles, where hybrid (perpetual) bonds are treated as 100% equity


2) Rating agency methodology treats the hybrid bonds as 50% debt and 50% equity. Net debt to EBITDA represents the ratio of net debt plus 50% of the group’s EUR 1.3 billion of hybrid bonds, divided by the last 12 months’ EBITDA



3) Excluding loan origination costs, commitment fees and hybrid bonds (average coupon of 5.05%)




Compared with 31 December 2018, net debt increased by 4.0% mainly reflecting the higher proportion of interest and dividend payments in the first half of 2019. In line with the previous year’s trend, cash outflows are expected to be moderate in H2 2019 relative to H1 2019, with the net debt to EBITDA ratio expected to be at or below 3.30 times by the end of 2019.




In June 2019, SES completed the renewal of the group’s EUR 1.2 billion Committed Revolving Credit Facility. The margin for the new five-year facility is 40 basis points (for a Baa2/BBB rating) above EURIBOR and is five basis points inside the pricing of the former syndicated and committed credit facility closed in January 2014.




CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE


EUR million          H1 2019          H1 2018



Average EUR/USD exchange rate          1.1326          1.2127
                       
Revenue          961.4          981.4
                       
Operating expenses(1)          (376.9)          (360.3)
EBITDA(2)          584.5          621.1
                       
Depreciation and impairment expense          (323.0)          (303.5)
Amortisation expense          (45.3)          (39.9)
Operating profit          216.2          277.7
                       
Net financing costs          (81.4)          (75.2)
Profit before tax          134.8          202.5
                       
Income tax benefit/(expense)          22.4          40.9
Profit after tax          157.2          243.4
                       
Non-controlling interests          12.0          (15.7)
Profit attributable to owners of the parent          169.2          227.7
                     



 
Basic earnings per share (in EUR)(3)
                     
Class A shares          0.32          0.45
Class B shares          0.13          0.18



1) Includes EUR 11.4 million of restructuring charges in H1 2019 and EUR 8.4 million in H1 2018


2) Earnings before interest, tax, depreciation, amortisation and share of associates’ result (net of tax)


3) 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. Fully diluted earnings per share are not significantly different from basic earnings per share





CONSOLIDATED STATEMENT OF FINANCIAL POSITION



AS AT EUR million          30 June 2019          31 December 2018



Property, plant and equipment          5,350.4          5,106.9
Assets in the course of construction          777.3          907.4
Intangible assets          4,710.0          4,720.5
Other financial assets          11.0          6.5



Trade and other receivables          292.4          294.5
Deferred customer contract costs          15.5          10.3
Deferred tax assets          206.3          162.3
Total non-current assets          11,362.9          11,208.4
Inventories          37.9          35.1
Trade and other receivables          537.4          614.2
Deferred customer contract costs          14.8          17.5
Prepayments          53.0          62.8
Derivatives          --          0.2
Income tax receivable          8.4          12.0
Cash and equivalents          322.5          909.1
Total current assets          974.0          1,650.9
Total assets          12,336.9          12,859.3
     
                 
Equity attributable to the owners of the parent          5,941.0          6,148.4
Non-controlling interests          90.7          102.2
Total equity          6,031.7          6,250.6
                       
Borrowings          3,247.6          3,908.5
Provisions          16.5          16.8
Deferred income          344.9          370.3
Deferred tax liabilities          394.0          412.5
Other long-term liabilities          171.0          133.9
Lease liabilities          28.6          28.6
Fixed assets suppliers          500.0          200.9
Total non-current liabilities          4,702.6          5,071.5
Borrowings          690.7          476.4
Provisions          54.8          48.6
Deferred income          416.1          476.1
Trade and other payables          361.2          367.5
Lease liabilities          9.6          9.5
Fixed assets suppliers          59.9          130.8
Derivatives          --          0.1
Income tax liabilities          10.3          28.2
Total current liabilities          1,602.6          1,537.2
Total liabilities          6,305.2          6,608.7
       
                
Total equity and liabilities          12,336.9          12,859.3
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE
EUR million          2019           2018
Profit before tax          134.8           202.5
     
                  
Taxes (paid)/received          (39.7)           3.6
Adjustment for non-cash items          432.4           395.9
Consolidated operating profit before working capital changes          527.5           602.0
Changes in working capital          26.0           86.0
Net operating cash flow          553.5           688.0
       
                 
Payments for purchases of intangible assets          (12.0)           (15.1)
Payments for purchases of tangible assets          (159.6)           (231.6)
Other investing activities          (2.1)           (2.6)
Cash flow from investing activities          (173.7)           (249.3)
Free cash flow before financing activities          379.8           438.7
                        

Proceeds from borrowings          --           500.0
Repayment of borrowings          (458.5)           (26.9)
Coupon paid on perpetual bond          (65.6)           (65.6)
Dividends paid on ordinary shares, net of dividends received on treasury shares          (326.7)           (327.3)

Dividends paid to non-controlling interests          (0.5)           (3.1)
Interest paid          (113.7)           (102.8)
Payments for acquisition of treasury shares          (20.3)           (0.6)
Proceeds from treasury shares sold and exercise of stock options          26.1           0.1
Lease payments          (5.1)           (5.2)

Other financing activities          --           (0.7)
Cash flow from financing activities          (964.3)           (32.1)
Free cash flow after financing activities          (584.5)           406.6
          
             
Net foreign exchange movements          (2.1)           8.9
Cash and equivalents at beginning of the period          909.1           269.6
Net increase/(decrease) in cash and equivalents          (586.6)           415.5
Cash and equivalents at end of the period          322.5           685.1






Supplementary information:



QUARTERLY REVENUE BY VERTICAL



Revenue (reported)           Change (year-on-year) at constant FX
EUR million          Q1 2019           Q2 2019           H1 2019           Q1 2019           Q2 2019           H1 2019




Video Distribution          229.2           225.3           454.5           -8.9%           -11.2%           -10.0%
- Underlying          228.4           225.3           453.7           -8.1%           -9.2%           -8.7%
- Periodic          0.8           --           0.8           n/m           n/m           n/m
Video Services          74.9           75.2           150.1           -4.5%           -13.8%           -9.4%
- Underlying          74.9           75.2           150.1           -4.5%           -13.8%           -9.4%
- Periodic          --           --           --           n/m           n/m           n/m
Video (total)          304.1           300.5           604.6           -7.8%           -11.9%           -9.9%
- Underlying          303.3           300.5           603.8           -7.3%           -10.4%           -8.8%
- Periodic          0.8           --           0.8           n/m           n/m           n/m
Government          68.5           73.4           141.9           +9.6%           -2.0%           +3.3%
- Underlying          68.5           71.4           139.9           +9.6%           +6.3%           +7.9%
- Periodic          --           2.0           2.0           n/m           n/m           n/m
Fixed Data          58.7           58.2           116.9           -1.3%           -5.5%           -3.5%
- Underlying          58.7           56.6           115.3           -1.3%           -3.2%           -2.2%
- Periodic          --           1.6           1.6           n/m           n/m           n/m
Mobility          49.2           48.2           97.4           +23.2%           +12.9%           +17.8%
- Underlying          43.4           48.2           91.6           +8.7%           +12.9%           +10.9%
- Periodic          5.8           --           5.8           n/m           n/m           n/m
Networks (total)          176.4           179.8           356.2           +8.9%           +0.3%           +4.4%
- Underlying          170.6           176.2           346.8           +5.4%           +4.7%           +5.0%
- Periodic          5.8           3.6           9.4           n/m           n/m           n/m
Sub-total          480.5           480.3           960.8           -2.3%           -7.7%           -5.1%
- Underlying          473.9           476.7           950.6           -3.1%           -5.4%           -4.2%
- Periodic          6.6           3.6           10.2           n/m           n/m           n/m
Other(1)          0.1           0.5           0.6           n/m           n/m           n/m
Group Total          480.6           480.8           961.4           -2.3%           -7.7%           -5.1%


“Underlying” revenue represents the core business of capacity sales, as well as associated services and equipment. This revenue may be impacted by changes in launch schedule and satellite health status. “Periodic” revenue separates 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 capacity; accelerated revenue from hosted payloads during the course of construction; termination fees; insurance proceeds; certain interim satellite missions and other such items when material.



1) Other includes revenue not directly applicable to Video or Networks







QUARTERLY INCOME STATEMENT (AS REPORTED)



EUR million          Q2 2018           Q3 2018           Q4 2018           Q1 2019           Q2 2019



Average EUR/USD exchange rate          1.2033           1.1682           1.1418           1.1451           1.1201
                                                            
Revenue          503.8           488.0           540.9           480.6           480.8
Operating expenses          (187.1)           (181.4)           (213.1)           (190.5)           (186.4)
EBITDA          316.7           306.6           327.8           290.1           294.4
EBITDA margin          62.9%           62.8%           60.6%           60.4%           61.2%
                                                            
Depreciation and impairment expense          (156.5)           (160.2)           (255.3)           (156.4)           (166.6)
Amortisation and impairment expense          (21.3)           (19.8)           (85.7)           (20.5)           (24.8)
Operating profit          138.9           126.6           (13.2)           113.2           103.0
Operating profit margin          27.6%           26.0%           -2.5%           23.6%           21.4%
                                                            
Net financing costs          (39.3)           (36.3)           (34.8)           (37.8)           (43.6)
Profit before tax          99.6           90.3           (48.0)           75.4           59.4
                                                            
Income tax benefit/(expense)          30.8           (13.6)           14.6           (7.2)           29.6
                                                            
Non-controlling interests          (0.9)           (0.7)           22.1           4.0           8.0
Profit attributable to owners of the parent          129.5           76.0           (11.3)           72.2           97.0
                                                            
Basic earnings per share (in EUR)(1)                                                           
Class A shares          0.26           0.14           -0.05           0.13           0.19
Class B shares          0.10           0.06           -0.02           0.05           0.07




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





QUARTERLY OPERATING PROFIT (AT CONSTANT FX)

EUR million          Q2 2018           Q3 2018           Q4 2018           Q1 2019           Q2 2019



Average U.S. dollar exchange rate          1.1201           1.1201           1.1201           1.1201           1.1201
Revenue          520.8           498.2           546.1           485.8           480.8
Operating expenses          (194.5)           (186.2)           (215.7)           (193.2)           (186.4)
EBITDA          326.3           312.0           330.4           292.6           294.4
EBITDA margin          62.7%           62.6%           60.5%           60.2%           61.2%
                                                            
Depreciation and impairment expense          (163.4)           (164.7)           (258.6)           (158.5)           (166.6)
Amortisation and impairment expense          (21.6)           (20.0)           (87.0)           (20.6)           (24.8)
Operating profit          141.3           127.3           (15.2)           113.5           103.0
Operating profit margin          27.1%           25.6%           -2.8%           23.4%           21.4%






Disclaimer



This presentation does not, in any jurisdiction, and in particular not in the U.S., constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, or any investment advice in connection with, any securities of SES nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.



No representation or warranty, express or implied, is or will be made by SES, its directors, officers or advisors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation, and any reliance you place on them will be at your sole risk. Without prejudice to the foregoing, none of SES or its directors, officers or advisors accept any liability whatsoever for any loss however arising, directly or indirectly, from use of this presentation or its contents or otherwise arising in connection therewith.



This presentation includes “forward-looking statements”. All statements other than statements of historical fact included in this presentation, including, without limitation, those regarding SES’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to SES products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of SES to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding SES and its subsidiaries and affiliates, present and future business strategies and the environment in which SES will operate in the future and such assumptions may or may not prove to be correct.



These forward-looking statements speak only as at the date of this presentation. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. SES and its directors, officers and advisors do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

 

Richard Whiteing  Photo: Business Wire
 



Permanent-URL: http://www.automobilsport.com/ses-half-year-2019-results-financial-highlights---194725.html

26.07.2019 / MaP

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08.04.2019
TV Homes across the U.S. will continue to receive Crown Media Family Networks’ channels because of an important renewal agreement with SES, the world’s leading satellite operator.  Crown Media Family Networks to Deliver Growing Hallmark Channel Lineup to more >>
O3b Satellites Roar into Space, Scaling SES’s MEO Constellation
05.04.2019
VIDEO HEREFour additional satellites will seamlessly scale SES’s MEO constellation which has positively impacted millions of people with low-latency, high-performance da more >>
SES Shareholders Approve All Resolutions at Annual General Meeting
04.04.2019
Dividend of EUR 0.80 per A-share approved SES (Euronext Paris and Luxembourg Stock Exchange: SESG) held its Annual General Meeting (AGM) today in Betzdorf, Luxembourg.   SES Shareholders Approve All Resolutions at Annual Genera more >>
SES Reach Grows to 355 Million Homes Worldwide
02.04.2019
SES’s annual market research demonstrates its role in delivering video to a substantial global audience of over 1 billion people SES strengthens its position as more >>
The Ritz-Carlton Yacht Collection to Provide Luxury Connectivity Experience Powered by SES Networks
27.03.2019
SES Networks’ Signature Maritime Solution to offer unmatched connectivity at sea aboard custom-built luxury yachts SES Networks will be providing an innovative, fully-managed hybrid broadband connectivity service to The Ritz-Carlt more >>
Stéphane Goeury est nommé Directeur Général de Kymco Lux
19.03.2019
Jean-Luc L’Hermine et Kymco Taiwan ont décidé d’un commun accord de mettre un terme à leurs collaborations. Nous remercions Jean-Luc l’Hermine, qui a occupé différentes fonctions chez Kymco Lux depuis 2012, pour son travail et lui souhaitons beaucoup de succès dans ses futurs projets professionnels. more >>
Benin Accelerating Roll-out of Digital Terrestrial Television with SES
13.03.2019
Viewers across the West African region will be able to receive 15 new channels via SES’s satellite at 47.5 degrees West Viewers in the Republic of Benin are now receiving 15 new Free-to-Air (FTA) channels from satellite, thanks to a new agreement the Government of the more >>
SES-12 Goes Operational to Serve Asia-Pacific and the Middle East
26.02.2019
Powerful satellite with high throughput spot beams and wide beams will elevate viewing and connectivity experiences to meet diverse needs of video, fixed data, mobility and government customers SES announced today that its newest satellite, SES-12, is now more >>
Game of Code challenges in Luxembourg
15.02.2019
For Game of Code 4th edition, the IT One community offers you four new coding challenges during this unique hackathon in Luxembourg, on March 8th & 9th. This year, the sponsors Digital Luxe more >>
EU Maritime Safety Agency Awards Managed Connectivity Services Contract to SES
14.02.2019
Maritime safety, security and pollution response provided by the European Maritime Safety Agency (EMSA) will be enhanced by SES Networks’ managed connectivity services for Remotely Piloted Aircraft Systems photo caption: EU Mar more >>
O3b Satellites Arrive at Kourou for March Launch
07.02.2019
Four new satellites to scale up the only fully-funded and proven non-geostationary constellation providing the world’s only low-latency, fibre-like connectivity for data services delivered from space more >>
RCN Launches New Ultra HD 4K Channels with SES
05.02.2019
Award-winning cable and high-speed internet provider now offers customers access to crystal-clear pictures with seven new 4K channels from the North American SES Ultra HD Platform RCN, an award-winning provider of high-speed internet, digital T more >>
Discovery Deutschland Continues to Rely on SES’s MX1
05.02.2019
...for Managed Playout Services and More SES subsidiary, MX1, provides managed playout services for 7 channels and access to Europe’s strongest video neighbourhood for Discovery Deutschland’s new channel TLC Austria more >>
SES Strengthens Leadership Team and Enhances Customer Experience
05.02.2019
....Through Establishment of Global Services Organisation Chief Services Officer (CSO) John Baughn to lead global customer services while new Chief Technology Officer (CTO) Ruy Pinto appointed to head integrated global technology team more >>
Connectivity in Tonga Restored by SES Networks and Digicel Following Fibre Outage
30.01.2019
Deployment of SES Networks’ Signature Telecom Solution re-enabled mobile networks and broadband access across the South Pacific nation photo caption: Connectivity in Tonga Restored by SES Networks a more >>
Diego
29.01.2019
La Fédération des Artisans et Enovos Services Luxembourg proposent des produits et services énergétiques via la plateforme en ligne « diego »« diego » est une initiative d more >>
Resolute Mining Connects Syama Operations to the Cloud with SES Networks
24.01.2019
High-performance satellite service enables Resolute Mining to fully digitise and connect remote operations while capitalising on cloud-based applications Resolute Mining Limited is revolutionising its operations in Mali by bringing high-speed, low-latency more >>
Adal et Fegarlux fusionnent pour créer Fedamo
21.01.2019
A la fin de l'année 2018, deux des principales fédérations automobiles du Grand-Duché de Luxembourg, l'Adal (Association des distributeurs automobiles luxembourgeois) et la Fegarlux (Fédération des Garagistes du Grand-Duché de Luxembourg) ont fusionné pour créer la Fédamo. L'officialisation a eu lieu le lundi 14 janvier derni more >>
BFBS Brings More British Programming to U.K. Troops in Remote Regions via SES
09.01.2019
British Forces Broadcasting Service (BFBS) extends multi-year contract with increased SES capacity to deliver content to more serving military around the worldGreater numbers of British forces and their families stationed abroad, including Royal Navy ships at more >>
SES Successfully Placed EUR 400 Million Multi-Tranche Schuldschein Loan
19.12.2018
With completion of EUR 400 million loan facilities, SES is fully funded into 2020 SES S.A., the world’s leading satellite operator, has completed the syndication of Schuldschein Loans for a total amount of EUR 400 million, comp more >>
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