PARIS, February 10 /PRNewswire-FirstCall/ --
- Sustained revenue growth: +7.9% compared with first-half 2007-2008
- Continuing momentum of Video Applications: +5.4%
- Strong expansion of Data and Value-Added Services: +12.4%
- Excellent performance of key financial indicators
- EBITDA(1) up 7.4% - EBITDA margin at 80.9%
- Significant increase in net cash flow from operating activities:
+24.1%, representing more than 75% of revenues
- Upward revision of revenue objective for 2008-2009
- Medium-term outlook confirmed for the period 2008-2011
- Procurement of ATLANTIC BIRD(TM) 4-R satellite for broadcasting in
Middle East
Eutelsat Communications (ISIN: FR0010221234 - Euronext Paris: ETL), one
of the world's leading satellite operators, today reported results for the
first half ended December 31, 2008.
Six months ended December 31 2007 2008 Change
Key elements of consolidated income statement
Revenues EURm 429.4 463.5 +7.9%
EBITDA EURm 349.2 375.1 +7.4%
EBITDA margin % 81.3 80.9 -0.4 pt
Group share of net income EURm 88.5 135.2 +52.8%
Diluted earnings per share EUR 0.404 0.615 +52.2%
Key elements of consolidated cash flow statement
Net cash flow from operating
activities EURm 285.0 353.7 +24.1%
Capital expenditure EURm 148.5 140.6 -5.3%
Operating free cash flow EURm 136.5 213.1 +56.1%
Key elements of financial structure
Net debt EURm 2,338 2,408 +3.0%
Net debt/EBITDA(2) x 3.48 3.34 -0.14 pt
Key operational metrics
Backlog EURbn 3.6 3.5 -
Leased transponders Units 427 488 +61
Commenting on first half 2008-2009 results, Giuliano Berretta, Chairman
and CEO of Eutelsat Communications said: "The growth recorded by our Group in
this first half year is strong new evidence of the quality of our business
model and the validity of our strategic choices.
Our entire set of activities shows year-on-year improvement. The
long-term renewal at our HOT BIRDTM position of multiple contracts at higher
tariffs, together with the expansion of existing platforms and the arrival of
new digital TV players further enhance the pull of our premium video
neighbourhood for Europe. Video activity at our other neighbourhoods also
continues to expand as we pursue our strategy of cascading satellites and
channels to new locations to respond to dynamic regional television markets
including in central Europe, Russia, the Middle East and Africa. The volume
of HDTV business has also accelerated to over 70 channels broadcasting across
our fleet, further bolstering our position in this emerging television format.
Our Data and Value-Added Services are showing remarkably progress, with
notably a positive market response to our TOOWAY(TM) consumer satellite
broadband service. In these high-growth markets with strong growth potential,
the Group has been actively innovating with the aim to replicate the levels
of success in broadband which we have already achieved in broadcasting. Our
commitment is to building with our partners a lasting and profitable
broadband model that will be scalable over the long term as consumer habits
evolve. At a time when European governments are calling for universal
broadband access, Eutelsat's position as a precursor in consumer satellite
broadband, with our investment in a revolutionary system combining a Ka-band
satellite, KA-SAT, with an extensive ground system, places us in a unique
position from a competitive standpoint.
These commercial successes consolidate our leadership in the Fixed
Satellite Services sector in the EMEA(3) region, while our EBIDTA margin of
above 80% stays at the highest level of the industry globally. This semester
also confirms Eutelsat's outstanding visibility over our revenue streams with
a backlog rising to 3.5 billion euros with an average residual life reaching
almost eight years.
In the current environment, there is no doubt that Eutelsat is benefiting
from its position as a key infrastructure at the heart of the digital economy
as we offer our customers the access they need to reach their audiences. This
strong performance in the first semester enables the Group to raise its
revenue objective to more than 910 million euros for the full year, up from
more than 900 million euros initially announced in July 2008."
Sustained Revenue Growth Across Full Range Of Applications: +7.9%
Note: Unless otherwise stated, all growth indicators or comparisons are
made against the first half of the prior year or December 31, 2007. The share
of each application as a percentage of total revenue is calculated excluding
"other revenues".
Revenues by business application (in million of euros)
Change
Six months ended December 31 2007 2008 In EUR In %
million
Video Applications 319.3 336.6 +17.3 +5.4%
Data & Value Added Services 75.0 84.2 +9.3 +12.4%
of which Data Services 58.0 64.5 +6.4 +11.1%
of which Value Added Services 16.9 19.8 +2.9 +16.8%
Multi-usage 29.5 34.9 +5.4 +18.4%
Others 5.6 7.7 +2.1 N.M.
Total 429.4 463.5 +34.1 +7.9%
At a constant euro-dollar exchange rate, revenue growth would have been
7.2% compared to the first half of the previous year.
Video Applications (73.8% of revenues): Eutelsat ranks Ndegrees1 in EMEA
Region
At December 31, 2008, 3,218 channels and interactive services were
broadcasting from Eutelsat's nine video neighbourhoods, up by 267 channels
year-on-year (+9.0%), further consolidating the Group's leadership for
satellite broadcasting in the EMEA region.
Video Applications revenue growth was driven by:
- The pull of the HOT BIRD(TM) video neighbourhood at 13degrees East
which benefited from the long-term renewal of major contracts (including
with ART and with Telespazio for RAI), the lease of additional capacity
to significant customers (Sky Italia, Polsat, NOVA) and the launch of
TeleSAT, the first TV platform in French-speaking Belgium, and of
Orange TV. This activity reconfirms the leadership of the HOT BIRD(TM)
neighbourhood for the development of pay-TV across Western Europe.
- The strengthening of all other video neighbourhoods, driven in
particular by Russia, central and eastern Europe, the Middle East and
Africa and by the success of the 9degrees East neighbourhood which
enables consumer reception of television channels with channels
broadcast from the HOT BIRD(TM) neighbourhood.
The table below highlights the strongest growth rates during the
first-half 2008-2009:
Orbital position Markets served Channel count at Year-on-year
Dec.31, 2008 growth
36degreesEast Russia, Ukraine, 440 +31%
W4, SESAT 1 Africa
16degreesEast Central Europe, 384 +18%
W2 Indian Ocean
islands
9degrees East Europe, 149 +96%
EUROBIRD(TM) 9 Mediterranean
Basin
7degrees/8degreesWest North Africa, 276 +35%
ATLANTIC BIRD(TM)2 & 4 Middle East
- More than twofold increase in HDTV channels. The number of commercial
HDTV channels broadcast by Eutelsat's fleet grew to 73 at December 31,
2008 (compared to 31 as of December 31, 2007), of which 27 at the HOT
BIRD(TM) neighbourhood, thereby confirming Eutelsat's leadership for
HDTV in the EMEA region.
DATA and VALUE-ADDED SERVICES (18.5% of revenues): strong expansion
At EUR84.3 million in the first-half 2008-2009, revenue from Data and
Value-Added Services recorded 12.4% growth compared to the same period a year
ago.
Data Services (+11.1% at EUR64.5 million) in particular, reflect the
significant return to growth seen in the first quarter. This progress shows
the exceptional coverage provided by Eutelsat's satellites as well the Group
commercial efforts notably for the rapidly-growing markets of interconnecting
corporate networks, Internet backbone connectivity and GSM backhaul in
Africa, the Middle East and central Asia.
Value-Added Services (+16.8% at EUR19.8 million) continue to grow at a
robust pace, particularly the broadband access services D-STAR(TM)(4) and
TOOWAY(TM)(5) which grew by 29.7% to EUR15.2 million;
- The installed base of D-STAR(TM) broadband terminals serving corporates
and local communities grew by 1,843 (+23.4%) across all of the Group's
markets: Africa (+ 25%, with 735 new terminals), the Middle East (+25%
with 447 new terminals) and Europe (+22% with 633 new terminals);
- The commercial roll-out of the TOOWAY(TM) consumer broadband service
continued to progress. Now distributed by 26 partners in 18 countries
in Europe, the first half-year saw the selection of TOOWAY(TM) by
Fastweb, Italy's second-largest fixed telecommunications operator, in
order to extend broadband coverage throughout Italy;
- The SNCF, French national railways, decided to deploy its
satellite-based Internet access service on its entire fleet of 52 TGV
East high-speed trains.
MULTI-USAGE (7.7% of revenues): significant growth
Revenues from Multi-usage services rose significantly (+18.4% to EUR34.9
million(6)). Together with the appreciation of the US dollar against the
euro, this remarkable achievement primarily reflects the conclusion of new
capacity lease contracts and the renewal at higher tariffs of certain
contracts which expired during the first half 2008-2009.
Other revenues
Other revenues increased by EUR2.1 million to EUR7.7 million, including
notably a slight increase in external resources received for R&D projects.
SOLID performance of other operating INDICATORS
Increased visibility provided by backlog(7)
Main backlog indicators December June 30, December 31,
31, 2007 2008 2008
Value of contracts (in billion euros) 3.6 3.4 3.5
Weighted average residual life of 7.1 7.4 7.7
contracts (in years)
Share of Video Applications 92% 93% 92%
The evolution of the backlog compared to June 30, 2008 is mainly the
result of the renewal and increase of long-term contracts during the
first-half 2008-2009. The backlog represents 3.8 times annual revenues. With
a weighted average residual lifetime of almost eight years, the backlog
provides the Group with exceptional long-term visibility on its revenues and
its operating cash flows.
14.5% increase in leased transponders
As of December 31, 2008, the Group was leasing 488 transponders (up by 61
from a year ago), translating into an exceptionally fill rate above 97%(8).
The redeployment by the end of February of the HOT BIRD(TM) 7A satellite
to 9degrees East (EUROBIRD(TM) 9A) following the entry into service at
13degrees East on February 17 of HOT BIRD(TM) 9, and the expected deployment
of new satellites by the end of the financial year will significantly
increase Eutelsat's in-orbit resources in the short term to accompany market
expansion.
STRONG INCREASE IN NET INCOME
Extract from the consolidated income statement (in million of euros)(9)
Six months ended December 31 2007 2008 Change %
Revenues 429.4 463.5 +7.9%
Operating expenses(10) (80.2) (88.4) +10.2%
EBITDA 349.2 375.1 +7.4%
EBITDA margin 81.3% 80.9% - 0.4 pt
Depreciation and amortisation(11) 150.6) (143.4) -4.8%
Other operating revenues (costs) (4.8) 24.6 -
Operating income 193.8 256.3 +32.2%
Financial result (56.3) (49.8) -11.5%
Income tax (48.9) (71.2) +45.6%
Income from equity investments 6.0 6.7 +11.7%
Minority interests (6.3) (6.8) +7.9%
Group share of net income 88.5 135.2 +52.8%
EBITDA margin of over 80%
The excellent performance of all activities and the policy of tight cost
control have enabled the Group to post an EBITDA margin of 80.9%, which
remains at the highest level of leading Fixed Satellite Service operators(12).
The EUR8.2 million increase in operating expenses is chiefly attributable
to:
- A comparison effect corresponding to the high provision reversals
recorded in the first half of the previous year;
- A slight increase in professional tax resulting from the improvement of
Group results;
- The strengthening of resources aimed at selling the upcoming satellite
capacities and continued development of new services.
Substantial increase in operating income: +32.2%
Operating income is up by EUR62.5 million to EUR256.3 million,
representing 55.3% of revenues. This increase also benefited from:
- A sharp rise in "other operating revenues" following EUR25
million of income related to the sale of some rights in Hispasat;
- A 4.8% decrease in depreciation and amortisation expenses with
the end of EUROBIRD(TM) 9 satellite depreciation at the beginning of
the fiscal year and the decrease in depreciation charge for
EUROBIRD(TM) 3 following the impairment booked in the second half of
2007-2008.
Strong rise in net result Group share: +52.8%
As a consequence, the net result Group share has increased by EUR46.7
million to EUR135.2 million (29.2% of revenues). The increase resulted also
from:
- A slight improvement of the net financial result;
- A lower effective tax rate at 34%, compared to 36% in the first
half 2007-2008;
- Growth in income from equity investments, reflecting the
excellent commercial and operating performance of Hispasat, the leading
satellite operator in Spanish and Portuguese-language markets, of which
Eutelsat owns 27.69%.
ROBUST GROWTH OF OPERATING CASH FLOWS
- High level of net cash flow from operating activities,
exceeding 75% of revenues
- Balance sheet structure maintained: net debt to EBITDA ratio
contained at 3.34X
- Financial debt optimised and hedged
Substantial increase of net cash flow from operating activities: +24.1%
Providing further evidence of the strength of its business model,
Eutelsat once again generated strong net cash flow from operating activities
which represents 76.3% of revenues at EUR353.7 million.
The strong increase of net operating cash flow posted mainly resulted
from:
- EUR25 million of income related to the sale of some rights in Hispasat;
- Re-imbursement of EUR21.6 million of income tax.
Down 5% year-on-year, capital expenditures and financial investments
amounted close to EUR141 million and were entirely covered by net operating
cash flows. Capital expenditure was dedicated to:
- The completion of the HOT BIRD(TM) 9 and W2M satellite programmes and
their launch on December 20, 2008;
- The on-going manufacturing of satellites ordered during the previous
fiscal years: HOT BIRD(TM) 10, W2A, W7, W3B and KA-SAT.
As a consequence, operating free cash flow(13) amounted to EUR213
million, largely covering the distribution of EUR141.7 million approved by
shareholders in November 2008.
Solid financial structure
The Group continues to demonstrate its financial strength. Despite net
debt(14) increasing by 3% compared to December 31, 2007, the net debt to
EBITDA ratio was reduced to 3.34x, in line with the Group's objective of
between 3x and 4x.
Leverage ratio
Six months ended December 31 2007 2008
Net debt at the beginning of the period (in million 2,295 2,422
euros)
Net debt at the end of the period (in million euros) 2,338 2,408
Net debt / EBITDA(15) 3.5 3.34
As a reminder, the Group's financial debt is made of two syndicated
facilities:
- EUR1.9 billion (of which EUR300 million undrawn) with maturity ending
in June 2013 ;
- EUR1.3 billion (of which EUR400 million undrawn) with maturity ending
in November 2011.
During previous financial years, the Group subscribed to hedging
instruments against interest rate variations covering to their maturity a
large part of syndicated facilities. The average cost of debt drawn down by
the Group was 4.19% at December 31, 2008, net of hedging effects.
EVOLUTION OF SATELLITE FLEET
Upcoming entry into service of HOT BIRD(TM) 9 at 13degrees East
Launched on December 20, 2008, this satellite has now successfully
completed its in-orbit test phase. Its scheduled entry into service at
13degrees East on 17 February will further consolidate the level of in-orbit
redundancy at the Group's premium orbital position.
Redeployment of HOT BIRD(TM) 7A to 9degrees East
Following the entry into service of HOT BIRD(TM) 9 at 13degrees East, the
HOT BIRD(TM) 7A satellite will be redeployed by the end of February to
9degrees East and rebranded EUROBIRD(TM) 9A. The number of transponders in
operation at this new video neighbourhood will subsequently increase to 38
(+18).
Upcoming launches
In 2009, the Group schedules the following launches:
- February 12: HOT BIRD(TM) 10 whose main mission will be to
complete the full in-orbit sparing programme at the HOT BIRD(TM)
neighbourhood. Prior to this mission, the satellite will be deployed at
7degrees West to replace ATLANTIC BIRD(TM) 4 and to increase from 15 to
26 the number of transponders operating at this position for
broadcasting in the Middle East.
- March 28: W2A, which will replace the W1 satellite to more than double
resources currently available at 10degrees East. W2A will also
introduce the first European S-Band payload for Solaris Mobile;
- Mid-2009: W7, which will replace SESAT 1 at 36degrees East and triple
broadcasting resources for Russian and Sub-Saharan Africa markets.
New mission for W3B at 16degrees East
Designed to guarantee continuity of service in the event of a launch
failure of either the W2M, W2A or W7 satellites, W3B will go to the 16degrees
East neighbourhood after launch in mid-2010. The Group has decided not to
integrate the W2M satellite into its fleet(16) in the current circumstances
due to a major anomaly affecting this satellite's power subsystem. The W2M
programme is fully insured.
Procurement being finalised of ATLANTIC BIRD(TM) 4-R
The procurement of the ATLANTIC BIRD(TM) 4-R satellite is being
finalised. This satellite will take over from HOT BIRD(TM) 10 at 7degrees
West and expand resources to 50 Ku-band transponders at a key neighbourhood
for broadcasting in the Middle East. The launch of this satellite is
programmed for mid-2011. It forms part of the capital expenditure programme
which was communicated on July 28, 2008 and is confirmed below.
OUTLOOK
UPWARD REVISION OF 2008-2009 REVENUE OBJECTIVE
The Group raises its FY2008-2009 revenue objective to more than EUR910
million (up from more than EUR900 million). The Group also confirms its
EBITDA margin objective of more than 78%.
CONFIRMATION OF MID-TERM OBJECTIVES 2008-2011
The Group maintains its mid-term objectives for the period 2008-2011 as
communicated in July 2008:
- Revenue Compound Annual Growth Rate of 6%, accelerating over the
period;
- EBITDA margin above 77% for each financial year during the period;
- Capital expenditures of EUR450 million on average per year during the
period;
- Attractive distribution policy with a dividend pay-out ratio between
50% to 75% of Group share net income during the period 2008-2011.
Documentation
Interim consolidated accounts and presentation are available at
http://www.eutelsat.com
Conference call
Eutelsat Communications will hold a conference call on February 10, 2009
to present its financial results for the first half 2008-2009 at 3:30pm Paris
time (New York: 9.30am, London: 2.30pm). The call-in numbers are:
+33-1-01-70-99-42-77 from France
+44-207-138-0825 from Europe
+1-212-444-0481 (from USA).
A replay will be available from February 10 from 7pm (Paris time) to
February 17, midnight, by dialling:
+33-1-71-23-02-48 from France
+44-207-806-1970 from Europe
+1-718-354-11-12 from USA
Access code: 8042466 #
A presentation will be available on the Group's website
http://www.eutelsat.com from 8:00am (Paris time) on February 10, 2009 and the
webcast replay of the conference on February 11, 2009.
Financial calendar
- May 7, 2009: Revenue for third quarter ending March 31, 2009
- July 30, 2009: Results for full year ending June 30, 2009
The above financial calendar is provided for information purposes only.
It is subject to change and will be regularly updated.
About Eutelsat Communications
Eutelsat Communications (Euronext Paris: ETL, ISIN code: FR0010221234) is
the holding company of Eutelsat S.A.. With capacity commercialised on 25
satellites that provide coverage over the entire European continent, as well
as the Middle East, Africa, India and significant parts of Asia and the
Americas, Eutelsat is one of the world's three leading satellite operators in
terms of revenues. At 31 December 2008, Eutelsat's satellites were
broadcasting over 3,200 television channels and 1,100 radio stations. More
than 1,000 channels broadcast via its HOT BIRD(TM) video neighbourhood at 13
degrees East which serves over 120 million cable and satellite homes in
Europe, the Middle East and North Africa. The Group's satellites also serve a
wide range of fixed and mobile telecommunications services, TV contribution
markets, corporate networks, and broadband markets for Internet Service
Providers and for transport, maritime and in-flight markets. Eutelsat's
broadband subsidiary, Skylogic, markets and operates services through
teleports in France and Italy that serve enterprises, local communities,
government agencies and aid organisations in Europe, Africa, Asia and the
Americas. Headquartered in Paris, Eutelsat and its subsidiaries employ close
to 591 commercial, technical and operational experts from 27 countries.
http://www.eutelsat.com
* * *
Appendix
Revenue breakdown by application
Six months ended December 31* 2007 2008
Video Applications 75.3% 73.8%
17.7% 18.5%
13.7% 14.1%
4.0% 4.3%
7.0% 7.7%
Data & Value Added Services
............................................Data
.................Value Added Services
Multi-usage
Total 100% 100%
(*) excluding "other revenues" of EUR5.6 million in H1 2007-2008 and
EUR7.7 million for H1 2008-2009
Quarterly revenues by business application
Three months ended
In million of euros 30/09/2007 31/12/2007 30/09/2008 31/12/2008
Video Applications 158.1 161.2 166.7 169.8
Data & Value Added
Services 37.3 37.7 41.1 43.2
.........................Data 29.1 28.9 31.4 33.1
Value Added Services 8.2 8.8 9.7 10.1
Multi-usage 14.5 15.0 15.6 19.3
Other 2.0 3.6 3.2 4.5
Total 211.9 217.5 226.7 236.8
Change in net debt (in million of euros)
Six months ended December 31 2007 2008
Net cash flow from operating activities 285.0 353.7
Capital expenditure (148.5) (140.6)
Operating free cash flow 136.5 213.1
Interest and other fees paid, net (42.1) (49.7)
Acquisition of minority interests (3.4) (1.8)
Capital increase 0.1 0
Distributions to shareholders (including minority (138.9) (141,7)
interests)
Increase of net banking debt (non cash) (1) (2.3)
Other 6.5 (3.3)
Decrease (increase) in net debt (42.3) 14.3
Capacity available in stable orbit(17) and number of leased transponders
As of December 31 2005 2006 2007 2008
Operational transponders 460 479 505 501
Leased transponders 352 394 427 489
Fill rate (%)(18) 76.6% 82.2% 84.6% 97.6%
Estimated satellite launch schedule
Satellites Date Nominal capacity in Tpx
HOT BIRD(TM) 10 February 12, 2009 64 Ku
W2A March 28, 2009 46 Ku / 10 C / S-band
W7 June-August 2009 70 Ku
KA-SAT Mid-2010 > 80 spotbeams Ka
W3B Mid-2010 53 Ku / 3 Ka
ATLANTIC BIRD(TM) 4-R Mid-2011 50 Ku
Note: New satellites generally enter into service one to two months after
launch date.
---------------------------------
(1) EBITDA is defined as operating income before depreciation,
amortisation and other operating income/charges (impairment charges,
dilution profits (losses), insurance compensations, etc.).
(2) Based on last 12 months rolling
(3) Europe, Middle East, Africa
(4) The D- STAR service provides Internet access and Virtual Private
Networks to enterprises and institutions in regions with inexistent
or unreliable terrestrial broadband infrastructure.
(5) The TOOWAY(TM) service, both in Ka-band and Ku-band, provides
broadband access to households beyond range of terrestrial networks.
(6) At a constant euro-dollar exchange rate, multi-usage revenue growth
would have been 14.4%.
(7) Backlog represents future revenues from capacity lease agreements
(including contracts for satellites yet to be delivered). These
capacity lease agreements can be for the entire operational life of
the satellites.
(8) Based on 501 operational transponders in stable orbit as of December
31, 2008, compared with 505 as of December 31, 2007
(9) For more detail, please refer to Group interim consolidated accounts
athttp://www.eutelsat.com.
(10) Operating expenses is defined as the sum of cost of operations and
of sales & administrative expenses.
(11) Comprises amortisation expense of 22.2 million euros corresponding
to the intangible asset "Customer Contracts and Relationships"
identified during the acquisition of Eutelsat S.A. by Eutelsat
Communications.
(12) Eutelsat Communications, SES, Intelsat.
(13) Operating free cash flow is defined as net cash flow from operating
activities less acquisition of satellites and other property, plant
and equipment, net of disposals.
(14) Net debt includes all bank debt and all liabilities from long-term
lease agreements, less cash and cash equivalents and marketable
securities (net of bank credit balances).
(15) On last 12 month rolling
(16) See press release dated January 28, 2009
(17) Excluding inclined orbit capacity.
(18) Number of Eutelsat's fleet transponders in stable orbit.
For further information
Press
Vanessa O'Connor
Tel: +33-1-53-98-38-88
voconnor@eutelsat.fr
Frederique Gautier
Tel: +33-1-53-98-38-88
fgautier@eutelsat.fr
Investors
Gilles Janvier
Tel: +33-1-53-98-35-30
investors@eutelsat-communications.com
