SES S.A  Solid YTD performance and value creation initiatives on track

SES S.A Solid YTD performance and value creation initiatives on track

05.11.2020: SES S.A. announced financial results for the nine months ended 30 September 2020. Solid performance with continued strong underlying growth across Networks • Networks revenue +7.5% year-on-year(1,2); Q3 2020 Video rev


SES S.A. announced financial results for the nine months ended 30 September 2020.




Solid performance with continued strong underlying growth across Networks



• Networks revenue +7.5% year-on-year(1,2); Q3 2020 Video revenue stable quarter-on-quarter(1,2)


• Adjusted EBITDA(3) EUR 883 million representing 62.6% margin with recurring operating expenses reduced 3.7% year-on-year



On track to deliver on FY 2020 financial outlook


• Over 97% of group revenue outlook (EUR 1,860-1,900 million(4)) already contracted


• ‘Exceptional’ COVID-19 cost mitigations of around EUR 50 million underpin Adjusted EBITDA(3) outlook (EUR 1,120-1,160 million(4))
Strong progress across four key initiatives that will drive substantial long-term value


• On track to clear U.S. C-band by the stated deadlines and realise the full USD 4 billion of accelerated relocation payments


• Simplify & Amplify initiatives implemented unlocking EUR 40-50 million of annual EBITDA optimisations from 2021 onwards; having concluded its investigation, the SES Board has decided not to pursue a separation of Networks within SES at this time


• Building the multi-orbit ‘Network of the Future’ through launch and interoperability of SES-17 and O3b mPOWER. Positioned to capture growth resulting from the projected three-fold increase in addressable market(5); USD 0.5 billion of contract backlog secured across the programmes with commercial traction increasing as launch approaches


• Foundational and expanded partnership with Microsoft and Azure Orbital at the heart of ‘cloud-first’ strategy to transform service delivery, expand service offerings and enhance customer experience






Steve Collar, CEO of SES, commented
: “Our solid performance continued into the third quarter, despite ongoing COVID-19 headwinds, with sustained growth across Networks and stable revenue quarter-on-quarter in our Video business.


We were delighted to announce a substantial extension of our relationship with Canal+ across three orbital locations and valued at over EUR 230 million, as well as a meaningful extension of our strategic partnership with Microsoft as an Azure Orbital connectivity partner and satellite partner for Azure Modular Data Centres.



We took measures early in the development of the COVID-19 pandemic to protect the bottom line and the benefits of these cost-saving measures are reflected in our resilient Adjusted EBITDA performance. Execution remains the priority with the business well placed to deliver on our full year outlook.



We are executing strongly on the four transformational initiatives which, together with ongoing execution in the core of the business, will deliver substantial value for our shareholders. I am particularly pleased with the progress being made towards repurposing U.S. C-band with the transition plan fully on track, the FCC auction due to start next month and deadline for realising the first relocation payment now only 13 months away.



We have fully implemented measures to focus the business, simplify operations and unlock EUR 40-50 million of annualised EBITDA savings from 2021. We have chosen not to pursue the separation of Networks within SES at this time in favour of driving strong operational focus within our Video and Networks businesses.



We are already strongly differentiated in Networks and, with the launches of SES-17 and O3b mPOWER less than a year away, we are continuing to deliver on our vision for cloud-enabled, multi-orbit, seamless, automated and flexible network services. We have already signed USD 500 million in contract backlog for SES-17 and O3b mPOWER and will report regularly on our progress as we move towards launch of our ‘Network of the Future’.


 An important enabler for this network is our cloud-first strategy. With SES now an Azure Orbital connectivity provider, our partnership with Microsoft has extended to co-located O3b mPOWER gateways ensuring that Azure is only ever one hop away for our customers.”





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

2 At constant FX which refers to comparative figures restated at the current period FX to neutralise currency variations

3 Excluding restructuring charge and operating expenses recognised in relation to U.S. C-Band repurposing (disclosed separately)

4 Financial outlook assumes a EUR/USD FX rate of EUR 1 = USD 1.15, nominal satellite health and launch schedule

5 Source: Northern Sky Research (June 2020) Networks global industry capacity revenue growth over the next 10 years (2020-2029)








Key business and financial highlights



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.








• Group revenue of EUR 1,410 million included EUR 9 million of periodic and other revenue (YTD 2019: EUR 18 million). Underlying revenue (excluding periodic and other) declined by 2.3% (year-on-year at constant FX) to EUR 1,401 million.


• Video underlying revenue of EUR 832 million (-8.1% at constant FX) reflected the combination of lower Distribution revenue (-7.3%), from ‘right-sizing’ of capacity by customers in mature markets, and lower Services revenue (-10.3%) due to reduced exposure to low margin activities and the impact of COVID-19 on Sports & Events revenue. Q3 2020 underlying revenue (EUR 273 million) was in line with the previous quarter at constant FX.


• Networks underlying revenue grew, for the third consecutive year, by 7.5% at constant FX to EUR 569 million with double-digit growth in Mobility (+17.9%) and a return to growth in Fixed Data (+6.4%), while Government (+1.3%) benefited from new business secured since Q2 2020 and which contributed to sequential growth in overall Networks revenue to EUR 189 million in Q3 2020.


• Adjusted EBITDA of EUR 883 million represented an Adjusted EBITDA margin of 62.6% (YTD 2019: 62.3%). YTD 2020 operating expenses (excluding restructuring and C-Band) were 3.7% lower year-on-year at EUR 527 million.


• Adjusted EBITDA excludes a restructuring charge of EUR 28 million in relation to the Simplify & Amplify transformation programme (YTD 2019: EUR 14 million) and EUR 21 million (YTD 2019: nil) of operating expenses associated with the accelerated repurposing of U.S. C-band spectrum.


• Depreciation and amortisation expense of EUR 537 million was 3.7% lower (year-on-year) as the impact of new satellites was more than offset by other satellites reaching the end of their depreciable life, as well as increases in the depreciable life of certain assets.


• The reduction in net profit to EUR 154 million in YTD 2020 mainly reflected the combination of the lower reported EBITDA (including the restructuring and C-band expenses noted above) and net foreign exchange losses compared to YTD 2019, which also included an income tax benefit of EUR 16 million. These items offset the positive contribution from lower depreciation, amortisation and net interest expenses.


• The Adjusted Net Debt to Adjusted EBITDA ratio of 3.2 times (including 50% of the hybrid bonds as debt, per the rating agency methodology) was lower (YTD 2019: 3.4 times).


• Fully protected contract backlog at 30 September 2020 was EUR 5.8 billion (gross backlog of EUR 6.3 billion when including backlog subject to contractual break clauses). This includes USD 0.5 billion of future total revenue secured across SES-17 and O3b mPOWER which remain on track to begin commercial service during the second half of 2022.


• The outlook for FY 2020 revenue and Adjusted EBITDA, as well as the forecast for capital expenditure (representing net cash absorbed by investing activities excluding acquisitions and financial investments), presented with the H1 2020 results, are all on track.




Operational performance and commentary






“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 construction; termination fees; insurance proceeds; certain interim satellite missions and other such items when material. “Other” includes revenue not directly applicable to Video or Networks




Video: 59% of group revenue (YTD 2019: 62%)


At 30 September 2020, SES carried a total of 8,157 TV channels to viewers around the world including 2,964 channels in High Definition and Ultra High Definition (up 1% year-on-year). 69% of total TV channels are now broadcast in MPEG-4 with an additional 4% in HEVC.



Video Distribution


In Europe, modest volume reductions on some long-term renewals secured in late 2019 led to lower year-on-year revenue, albeit utilisation rates across SES’ industry-leading European Video neighbourhoods remained strong. North American development was impacted by ongoing ‘right-sizing’ of volume across U.S. cable neighbourhoods and the reduction in the wholesale business, resulting in lower overall year-on-year revenue.



In the International markets, the contribution of new revenue secured is yet to fully offset the impact of challenging trading environments, leading to a modest revenue reduction (year-on-year).



Video Services


The decision to reduce exposure to low margin services activities, and postponement or cancellation of sports and events in H1 2020 due to COVID-19, led to lower year-on-year revenue.



HD+ revenue was lower (year-on-year) due to reduced hardware sales as part of the ongoing shift to software solutions in partnership with TV set manufacturers and a modest reduction in the number of paying subscribers compared with Q3 2019, although the number of paying HD+ subscribers has improved over the last nine months.




Networks: 41% of group revenue (YTD 2019: 38%)



Government


Strong contributions from new business in both the U.S. Government and Global Government businesses during the third quarter led to overall growth (year-on-year) in YTD 2020 underlying revenue. U.S. Government revenue was ahead (year-on-year) benefiting from the contribution of new business signed in the first half of 2020 for both additional MEO- and GEO-enabled network solutions.



In Global Government, YTD 2020 revenue was stable overall, with an improved revenue run-rate compensating for the additional revenue in the prior period related to the completion of certain milestone-driven institutional projects.



Fixed Data



Positive outturns across the Americas and Asia-Pacific regions, as well as from new business in energy and cloud, more than offset lower wholesale revenue in Europe and contributed to overall growth (year-on-year) in Fixed Data. Growth in the Americas was supported by new and incremental managed services to tier one telecommunications companies and Mobile Networks Operators to deploy 4G networks and government funded rural WiFi projects.



The successful deployment of broadband access and mobile connectivity services to rural communities on behalf of SES’ customers, notably using SES-12 and MEO-enabled high throughput capabilities contributed to growth in Asia-Pacific.





Mobility



Double-digit growth (year-on-year) in the Aeronautical segment reflected the full year contribution of new business signed with several service providers during 2019. Similarly, in the Maritime segment, the full revenue contribution of expanded services with key cruise customers signed in 2019 and a good trajectory in commercial shipping over the last 12 months led to double-digit growth (year-on-year) in revenue.



As the vast majority of SES’ commercial contracts, including in Mobility, are fixed, the performance was largely unaffected by the impact of COVID-19 on customers and end markets served by SES in the Cruise and Commercial Aviation segments. Nevertheless, it is expected that the development of both existing revenue and pace of new business will continue to be impacted by COVID-19 in the near term.








 

 

ALTERNATIVE PERFORMANCE MEASURES


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.


These measures may not be comparable to similarly titled measures used by other companies and are not measurements under IFRS or any other body of generally accepted accounting principles, and thus should not be considered substitutes for the information contained in the Group’s financial statements.



Alternative Performance Measure

Definition

Adjusted EBITDA


EBITDA adjusted to exclude material exceptional and non-recurring items. In 2020 the primary exceptional and non-recurring items are restructuring charges announced in the framework of SES’ ‘Simplify and Amplify’ programme, and the net impact of the repurposing of U.S. C-Band spectrum.


Adjusted Net debt to Adjusted EBITDA


Adjusted net debt to Adjusted EBITDA, represents the ratio of net debt plus 50% of the group’s hybrid bonds (per the rating agency methodology) divided by the last 12 months’ (rolling) Adjusted EBITDA.




Richard Whiteing, Suzanne Ong- photos SES

Permanent-URL: http://www.automobilsport.com/ses-sa-solid-ytd-performance-value-creation-initiative-track---215506.html

05.11.2020 / MaP

More News

INRED and SES Networks Expand Wi-Fi Access Across Colombia, Connect Nearly One Million People in 424 Municipalities
04.11.2020
Collaboration accelerated government initiative to connect 100% of Colombia with a second deployment of 300 additional free community Wi-Fi zones enabled by high-speed broadband over satelliteOn the heels of a widely-successful more >>
SES Expands O3b mPOWER Technology Ecosystem with Modem Platform Partnerships
03.11.2020
Gilat and ST Engineering iDirect to provide O3b mPOWER core infrastructure that will support SES’s open networking strategySES today announced Gilat and ST Engineering iDirect as its latest technology partners who will be devel more >>
SES and CANAL+ Strengthen Partnership With Long-Term Extensions across Western Europe, Central Europe and Africa
29.10.2020
Substantial agreements across three orbital positions serve more than 10 million subscribers and add more than EUR 230 million in secured backlogSES and CANAL+ have signed new long-term strategic agreements for satellit more >>
Mercy Ships Leverages SES Networks’ Signature Maritime Solution to Bring Life-Saving Healthcare to World’s Deprived Regions
13.10.2020
Improved satellite-based connectivity will allow communities in developing countries to receive better healthcare services including distant diagnostics, instant analyses as well as remote medical trainings for local medical staff more >>
Human Capital Europe - The place where human capital, business and technology align
09.10.2020
After the success of the phygital edition of ICT Spring - the international tech summit broadcasted from Luxembourg - and to comply with the latest health restrictions, Farvest (B2B event and marketing agency), has decided to renew this hybrid experience and to turn Human Capital Europe, the biggest B2B gathering dedicated to the human resources sector in Luxembourg, into a phygital more >>
Game of Code 2020 Luxembourg : A digital edition
24.09.2020
The hackathon is back in Luxembourg…with a twist. Due to the current health situation, the organizers have turned the 2020 edition into a 100% online competition, with a 36-hour coding sprint. Participating teams of coders will do their best to solve - over the weekend - the three challenges cooked by the event’s partners, starting on October 9th. more >>
Isotropic Systems Signs Contract with SES GS to Initiate Multi-Orbit Trials of Next-Gen Multi-beam Antenna Technologies for U.S. Military
24.09.2020
Isotropic Systems’ prototype multi-beam terminals to be trialed at SES teleport and U.S. Army baseSES Government Solutions (SES GS), a fully-owned affiliate of SES, and Isotropic Systems, a leading developer more >>
SES Advances Digital Transformation with Cloud-First Strategy, Expanded Agreement
22.09.2020
Multi-year agreement with Microsoft includes Azure Orbital integration, SES’s expanded use of Azure and joint development of new video and data connectivity services more >>
SES Becomes Microsoft Azure Orbital Founding Connectivity Partner
22.09.2020
SES’s proven low-latency MEO managed services to be part of Microsoft’s new multi-orbit satellite connectivity integrated with Azure, promising optimized cloud application performance for O more >>
SES Simplifies Sports Production with Stockley Park Facility in London
17.09.2020
New facility offers easy access to SES’s global network and new video production services as sports relaunch worldwideAs remote production for sports ramps up around the globe, SES is providing broadcasters with a newly opened, full-service spor more >>
SES: A digital future for everyone - Economic growth in Latin America
01.09.2020
All of Latin America is seeing a movement towards digital growth and digitalisation. This is true both in remote regions with historically limited access to connectivity and in regions with demand and readiness to advance to the next level of digital capabilities. Throu more >>
SES picks SpaceX to launch four additional O3b mPOWER satellites
20.08.2020
SES's next-generation MEO communications system to scale and deliver proven low-latency, high-performance connectivity services as of 2021SES announced today that it has selected SpaceX as a launch partner to deliver the more >>
COMNET Extends SES Networks’ Connectivity Solutions Over Latin America
11.08.2020
COMNET and SES Networks’ extended partnership will see COMNET tap into the region’s high throughput satellite, SES-14, to gain enhanced coverage, capacity and flexibility over Latin AmericaCOMNET, one of Guatemala’s leadin more >>
SES Selects United Launch Alliance to Launch Two C-Band Satellites to Accelerate C-Band Clearing
05.08.2020
U.S.-based United Launch Alliance’s Atlas V rocket will launch satellites into orbit as part of SES’s contribution to facilitate 5G across America SES, the leader in global content connectivity solutio more >>
Human Capital Europe 2020
24.07.2020
Farvest, the Luxembourg B2B marketing agency is pleased to announce the second edition of Human Capital Europe next November 26th at the European Convention Center in Luxembourg. Last year, more than 950 CEOs, HR managers, startups, innovative companies, and investors attended this one-day event at the heart of Europe. more >>
SES Luxembourg - Deep Dive into 2019 Satellite Monitor Results
16.07.2020
Deepak Mathur, Executive Vice President,Global Sales, SES VideoFor more than 26 years, SES has been conducting Satellite Monitor, an annual research of TV markets we operate in worldwide, so more >>
SES launches Free-To-Air Satellite Channel to Fight Spread of COVID-19
14.07.2020
SES uses reliable content from trusted organisations such as UNICEF and AFP to bring critical, informative COVID-19 messages to rural communitiesMillions of households across Africa, Europe, an more >>
SES : Demand for Educational Ghanaian TV Channel Grows Amid COVID-19
29.06.2020
Free-to-Air educational TV channel becomes a critical resource for senior high school students across West African sub-regionJoy Learning, the free-to-air (FTA) not-for-profit T more >>
Satellite TV Gains Popularity in Ghana and Nigeria
25.06.2020
•    Study shows Satellite TV reception increases by 23% in Nigeria and 19% in Ghana in 2019 since the last study, conducted two years ago •    SES currently reaches 35 million TV households across the African Continent more >>
Ethiopian Ministry of Education partners with UNICEF, Save the Children and SES to broadcast educational content on Ethiosat TV Platform
25.06.2020
Ethiopia’s first dedicated TV platform adds nine educational channels to enable continued learning amid COVID-19 school disruptionThe Ethiopian Ministry of Educa more >>
B-LiFE, SES and GovSat Deploy Mobile COVID-19 Testing Laboratory to Italy
24.06.2020
The mobile laboratory will move across Piedmont region to support regional government’s effort of large-scale COVID-19 testingThe Piedmont regional government in Italy and healthcare more >>
SES Successfully Prices EUR 400 Million 8-Year Euro Bond
22.06.2020
SES S.A. announced today the successful launch and pricing of a bond offering in which it has agreed to sell senior unsecured fixed rate notes due in 2028 for a total amount of EUR 400 million. The notes will bear a Coupon of 2.00% per annum and were priced at 99.445% of their nominal value. more >>
SES Announces Senior Leadership Team Changes
18.06.2020
Long-time SES employee Thai Rubin to succeed John Purvis as Chief Legal Officer while Ferdinand Kayser, CEO of SES Video, to retire at year end after nearly 20 years at the companySES today announced more >>
RCS and SES Networks Expand Partnership with SD-WAN Service
18.06.2020
RCS to offer superior service availability with SES Networks’ new intelligent SD-WAN serviceRCS Communication, an ICT company in South Sudan, has adopted a Software-Defined Wide Area Net more >>
SES Selects Two U.S. Companies to Build Four New Satellites as Part of Accelerated C-Band Clearing Plan
16.06.2020
Northrop Grumman and the Boeing Company to manufacture and assemble the C-band only satellites in Dulles, Virginia and in Los Angeles, California Boeing/Artist’s Rendition of SES-20 and SES-21 satellites more >>
SkyNet de Colombia and SES Networks Ramp Up Connectivity Services to Aid Worst-hit COVID-19 Colombian Amazonas Communities
08.06.2020
Colombian municipalities of Leticia and Puerto Nariño in the Amazonas can access improved telemedicine services and reliable residential broadband Internet for e-learning platforms, remote working and communication with relatives more >>
SES unveils first TV market reception survey results in the Philippines
27.05.2020
•    Satellite ranks highest in terms of satisfaction when it comes to TV service and is second-most popular TV reception mode•    SES currently reaches 98% of satellite TV households in the Philippines and serves over 3.5 million homes across the country more >>
SES Elects to Accelerate Clearing of C-Band Spectrum in Support of FCC’s 5G Plan for the US
26.05.2020
SES will make substantial investments with U.S. companies to meet accelerated clearing goal and support U.S.’s global leadership in 5G while protecting critical broadcast services more >>
BBC World News and SES Extend HD Deal
13.05.2020
Audiences across Europe will continue to enjoy BBC World News on ASTRA 19.2 degrees East TV viewers across Western Europe will continue to be able to watch BBC World News thanks to an extended deal with SES. BBC Global News delivers its HD news channel, BBC World News more >>
Western Union Pays Tribute to First Responders and Essential Workers in Luxembourg
08.05.2020
 Western Union provides fee reduction for frontline and essential workers as a part of company’s ongoing efforts to provide essential money transfers and payments services amid the COVID-19 pandemicWestern Unio more >>
SES First Quarter 2020 Results -‘A solid quarter in line with expectations’
07.05.2020
SES S.A. announced solid financial results for the first three months ended 31 March 2020 with performance in line with the company’s expectations and strong underlying revenue growth in SES Networks. more >>
SES Delivers Over 8,300 TV Channels to 367 Million Homes Worldwide
23.04.2020
Leader in content and connectivity solutions increases technical reach across Africa, APAC, LATAM and Europe by 12 million TV households in 2019SES announced today tha more >>
SES Networks and OptimERA Scale Capacity for Remote Working, Distance Learning and Telemedicine in Rural Alaska City Under “Stay at Home” Rule
21.04.2020
Within days, ISP serving the city of Unalaska and surrounding areas demonstrates the flexibility of satellite-enabled connectivity by increasing network capacity Residents, businesses, schools, healthcare clinics and other organisations in parts of Alaska more >>
De Boer Marine to Deliver Managed Data Services Through SES Networks’ Skala Global Platform
15.04.2020
Shipowners and operators worldwide will benefit from high-quality connectivity and broadband servicesDe Boer Marine, a leading Dutch company specialised i more >>
SES Secures Worldwide Satellite Distribution of BVN TV
07.04.2020
Free-to-air Dutch-language channel is broadcast via ASTRA 19.2 degrees East, SES-5 and other satellitesPublic broadcaster BVN TV has signed a long-term worldwide distribution agreement with SES for the use o more >>
Shareholders Approve All AGM Resolutions and SES Board Elects Frank Esser as Chairperson
02.04.2020
Approved resolutions include SES’s 2019 financial accounts, a dividend of EUR 0.40 per A-share, reduction in the Board size from 14 to 12 Directors, re-election of three Board members, and first-time election of four Board members SES S.A. held its more >>
SES and Isotropic Systems Enter New Phase of Customer Edge Terminal Antenna Development to Unleash O3b mPOWER
05.03.2020
Isotropic’s high-throughput multi-beam terminals and SES’s multi-orbit domain open up new world of powerful, resilient connectivity and capabilities for broad range of commercial and government markets more >>
SES and Telesat Applaud FCC’s Final C-band Report and Order
05.03.2020
SES and Telesat, as founding members of the C-Band Alliance, again thank Chairman Ajit Pai and the Commission for their leadership and enormous efforts leading up to release of the final C-band Report and Order. Importantly, in the final order the FCC made necessary more >>
SES Announces Next Phase of Strategic Transformation
02.03.2020
Company to explore the creation of pure-play market verticals through the potential separation of its data business within SES ‘Simplify and Amplify’ will drive focus on company’s core strengths, simplify its operations and facilitate innovation for future growth SES is launching a comprehensive programme to position itself for more >>
2001-2020 copyright automobilsport.com