LUXEMBOURG–(BUSINESS WIRE)–SES S.A. announces financial results for the nine and three months ended 30 September 2022.
YTD financial performance reflects solid execution across the business, complemented by value-accretive DRS GES acquisition
US C-band clearing de-risked to deliver over $3 billion of value; differentiated investments to drive future long-term growth
Steve Collar, CEO of SES, commented: “Our year-to-date performance reflects solid ongoing execution across the business and we remain fully on track to deliver on our 2022 outlook, to capture significant value from US C-band, and to position SES for profitable long-term growth through the deployment of our state-of-the-art multi-orbit assets and architecture.
Our Networks business is up 2.7% year-on-year primarily driven by ongoing success in Cruise and Aviation. SES-17 is now contributing to growth across the Americas with 13 new deals signed in 8 different geographies, while Thales InFlyt Experience continues to transition aircraft successfully. In Government, we have completed the acquisition of DRS GES more quickly than expected and integration with our existing US Government business is well underway. The combined SES Government Solutions business now boasts scale and an expanded value proposition to our Government end-users just as we launch significant new assets in SES-17 and O3b mPOWER.
The first O3b mPOWER launch is scheduled for 15 December and, together with two further launches scheduled in Q1 2023, the constellation will enter service in Q3 2023. Importantly we have already deployed the O3b mPOWER environment on the ground, and our customers are starting to receive O3b mPOWER technology that will be deployed initially on our existing MEO constellation.
With the successful launches of our first three C-Band satellites, the second phase of clearing is de-risked and therefore we have clear line of sight to $3 billion in accelerated clearing payments due at the end of 2023. In equally good news, the additional US C-band clearing for Verizon is nearly complete and we expect to receive the majority of the $170 million of agreed proceeds by the end of this year.”
Key business and financial highlights (at constant FX unless explained otherwise)
SES regularly uses Alternative Performance Measures (APM) to present the performance of the Group and believes that these APMs are relevant to enhance understanding of the financial performance and financial position.
€million
YTD 2022
YTD 2021
Change as reported
Average €/$ FX rate
1.07
1.20
Revenue
1,400
1,319
+6.1%
Adjusted EBITDA
829
823
+0.7%
Adjusted Net Profit
277
225
+23.2%
Adjusted Net Debt / Adjusted EBITDA
4.0 times
3.4 times
n/a
Operational performance
REVENUE BY BUSINESS UNIT
Revenue (€ million) as reported
Change (YOY) at constant FX and scope(1)
Q1 2022
Q2 2022
Q3 2022
YTD 2022
Q1 2022
Q2 2022
Q3 2022
YTD 2022
Average €/$ FX rate
1.12
1.08
1.02
1.07
Video (total)
261
250
252
763
-2.6%
-7.7%
-6.5%
-5.6%
– Video (underlying)
251
250
252
753
-6.4%
-7.7%
-6.5%
-6.8%
– Periodic
10
–
–
10
n/m
n/m
n/m
n/m
Government (underlying)
71
75
107(2)
253(2)
-5.7%
-9.2%
-6.0%
-7.0%
Fixed Data (underlying)
58
64
69
191
-2.4%
+7.9%
+1.3%
+2.2%
Mobility (underlying)
57
62
73
192
+9.9%
+22.2%
+20.6%
+17.7%
Networks (total)
186
201
249
636
-0.3%
+4.4%
+3.9%
+2.7%
– Networks (underlying)
186
201
249
636
-0.3%
+4.4%
+3.9%
+2.7%
Sub-total
447
451
501
1,399
-1.7%
-2.7%
-1.9%
-2.1%
– Underlying
437
451
501
1,389
-3.9%
-2.7%
-1.9%
-2.8%
Other
1
–
–
1
n/m
n/m
n/m
n/m
Group Total
448
451
501
1,400
-1.6%
-2.7%
-2.0%
-2.1%
1) “At constant FX and scope” refers to comparative figures restated at the current period FX, to neutralise currency variations, and excluding the acquisition of DRS GES (which was completed on 1 August 2022). 2) As reported includes €32 million from the acquisition of DRS GES.
“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.
Future satellite launches
Satellite
Region
Application
Launch Date
SES-22
North America
Video (US C-band accelerated clearing)
Launched
SES-20 & SES-21
North America
Video (US C-band accelerated clearing)
Launched
O3b mPOWER (satellites 1-2)
Global
Fixed Data, Mobility, Government
Q4 2022
O3b mPOWER (satellites 3-4)
Global
Fixed Data, Mobility, Government
Q1 2023
O3b mPOWER (satellites 5-6)
Global
Fixed Data, Mobility, Government
Q1 2023
SES-18 & SES-19
North America
Video (US C-band accelerated clearing)
Q1 2023
O3b mPOWER (satellites 7-8)
Global
Fixed Data, Mobility, Government
2023
O3b mPOWER (satellites 9-11)
Global
Fixed Data, Mobility, Government
2024
ASTRA 1P
Europe
Video
2024
ASTRA 1Q
Europe
Video, Fixed Data, Mobility, Government
2024
SES-26
Africa, Asia, Europe, Middle East
Video, Fixed Data, Mobility, Government
2024
EAGLE-1
Europe
Government
2024
CONSOLIDATED INCOME STATEMENT
€ million
YTD 2022
YTD 2021
Average €/$ FX rate
1.07
1.20
Revenue
1,400
1,319
US C-band repurposing income
6
57
Operating expenses
(606)
(578)
EBITDA
800
798
Depreciation expense
(454)
(426)
Impairment expense
(24)
–
Amortisation expense
(40)
(72)
Operating profit
282
300
Net financing costs
(6)
(67)
Profit before tax
276
233
Income tax expense
(78)
(30)
Non-controlling interests
–
2
Net profit attributable to owners of the parent
198
205
Basic and diluted earnings per A-share (in €)(1)
0.39
0.39
Basic and diluted earnings per B-share (in €)(1)
0.16
0.15
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 assumed coupon, net of tax, on the perpetual bonds.
€ million
YTD 2022
YTD 2021
Adjusted EBITDA
829
823
US C-band reimbursement income
6
57
US C-band operating expenses
(24)
(75)
Other significant special items
(11)
(7)
EBITDA
800
798
€ million
YTD 2022
YTD 2021
Adjusted Net Profit
277
225
US C-band reimbursement income
6
57
US C-band operating expenses
(24)
(75)
Impairment expense
(24)
–
Other significant special items
(11)
(7)
Tax on significant special items
(26)
5
Net profit attributable to owners of the parent
198
205
SUPPLEMENTARY INFORMATION
QUARTERLY INCOME STATEMENT (AS REPORTED)
€ million
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Q3 2022
Average €/$ FX rate
1.22
1.20
1.19
1.15
1.12
1.08
1.02
Revenue
436
439
444
463
448
451
501
US C-band repurposing income
27
20
10
844
2
2
2
Operating expenses
(203)
(193)
(182)
(243)
(184)
(190)
(232)
EBITDA
260
266
272
1,064
266
263
271
Depreciation expense
(140)
(143)
(143)
(149)
(147)
(149)
(158)
Amortisation expense
(19)
(29)
(24)
(23)
(12)
(12)
(16)
Impairment expense
–
–
–
(724)
–
(24)
–
Operating profit
101
94
105
168
107
78
97
Net financing costs
(26)
(18)
(23)
(4)
(16)
(14)
24
Profit before tax
75
76
82
164
91
64
121
Income tax benefit/(expense)
(8)
(8)
(14)
79
(9)
(45)
(24)
Non-controlling interests
2
–
–
5
–
–
–
Net Profit
69
68
68
248
82
19
97
Basic earnings per share (in €) (1)
Class A shares
0.13
0.12
0.14
0.53
0.17
0.02
0.20
Class B shares
0.05
0.05
0.05
0.22
0.07
0.01
0.08
Adjusted EBITDA
268
276
279
268
274
271
284
Adjusted EBITDA margin
61%
63%
63%
58%
61%
60%
57%
US C-band repurposing income
27
20
10
844
2
2
2
US C-band operating expenses
(34)
(25)
(16)
(47)
(9)
(8)
(7)
Other significant special items
(1)
(5)
(1)
(1)
(1)
(2)
(8)
EBITDA
260
266
272
1,064
266
263
271
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 RATE OF €1: $1.13)
€ million
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Q3 2022
Average €/$ FX rate
1.13
1.13
1.13
1.13
1.13
1.13
1.13
Revenue
454
452
455
468
446
440
471
US C-band repurposing income
29
21
11
861
2
2
1
Operating expenses
(213)
(199)
(187)
(246)
(182)
(183)
(217)
EBITDA
270
274
279
1,083
266
259
255
Depreciation expense
(149)
(150)
(149)
(154)
(147)
(148)
(143)
Amortisation expense
(19)
(30)
(23)
(23)
(12)
(12)
(15)
Impairment expense
–
–
–
(739)
–
(24)
–
Operating profit
102
94
107
167
107
75
97
Adjusted EBITDA
278
285
286
271
274
267
267
Adjusted EBITDA margin
61%
63%
63%
58%
61%
60%
57%
US C-band repurposing income
29
21
11
861
2
2
1
US C-band operating expenses
(36)
(27)
(17)
(48)
(9)
(8)
(6)
Other significant special items
(1)
(5)
(1)
(1)
(1)
(2)
(7)
EBITDA
270
274
279
1,083
266
259
255
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
Reported EBITDA and EBITDA margin
EBITDA is profit for the period before depreciation, amortisation, net financing cost and income tax. EBITDA margin is EBITDA divided by revenue.
Adjusted EBITDA and Adjusted EBITDA margin
EBITDA adjusted to exclude significant special items. In 2021 and 2022, the primary exceptional items are the net impact of the repurposing of US C-band spectrum, restructuring charges, one-off regulatory charges arising outside ongoing operations, and costs associated with the acquisition and integration of new subsidiaries. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue.
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.
Adjusted Net Profit
Net profit attributable to owners of the parent adjusted to exclude the
After tax impact of significant special items.
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Presentation of Results:
A presentation of the results for investors and analysts will be hosted at 9.30 CET on 3 November 2022 and will be broadcast via webcast and conference call. The details for the conference call and webcast are as follows:
U.K.
+44 (0) 33 0551 0200
France
+33 (0) 1 70 37 71 66
Germany
+49 (0) 30 3001 90612
U.S.A.
+1 212 999 6659
Confirmation code
SES
Webcast registration
https://channel.royalcast.com/landingpage/ses/20221103_1/
The presentation is available for download from https://www.ses.com/investors/financial-results and a replay will be available shortly after the conclusion of the presentation.
About SES
SES has a bold vision to deliver amazing experiences everywhere on earth by distributing the highest quality video content and providing seamless connectivity around the world. As the leader in global content connectivity solutions, SES operates the world’s only multi-orbit constellation of satellites with the unique combination of global coverage and high performance, including the commercially proven, low latency Medium Earth Orbit O3b system. By leveraging a vast and intelligent, cloud-enabled network, SES is able to deliver high quality connectivity solutions anywhere on land, at sea or in the air, and is a trusted partner to the world’s leading telecommunications companies, mobile network operators, governments, connectivity and cloud service providers, broadcasters, video platform operators and content owners. SES’s video network carries around 8,000 channels and has an unparalleled reach of 366 million households, delivering managed media services for both linear and non-linear content. The company is listed on Paris and Luxembourg stock exchanges (Ticker: SESG). Further information is available at: www.ses.com.
Disclaimer
This presentation does not, in any jurisdiction, including without limitation 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 occur or 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.
______________________________
1 Excluding operating expenses/income recognised in relation to US C-band repurposing and other significant special items (disclosed separately)
2 At constant FX and scope which refers to comparative figures restated, to neutralise currency variations, and excluding the acquisition of DRS Global Enterprise Solutions (DRS GES)
3 Financial outlook assumes a €/$ FX rate of €1 = $1.13, nominal satellite health, and nominal launch schedule. ‘Standalone’ outlook excludes acquisition of DRS GES
4 Ratio of Adjusted Net Debt (including 50% of the €1.175 billion of hybrid bonds as debt) to Adjusted EBITDA
5 Gross backlog $955 million (fully protected: $710 million)
Richard Whiteing
Investor Relations
+352 710 725 261
richard.whiteing@ses.com
Suzanne Ong
External Communications
+352 710 725 500
suzanne.ong@ses.com
Richard Whiteing
Investor Relations
+352 710 725 261
richard.whiteing@ses.com
Suzanne Ong
External Communications
+352 710 725 500
suzanne.ong@ses.com