newsonline24

Solid H1 performance in line with expectations and continued underlying growth in Networks of +7.1% year-on-year^([1],[2])

• Revenue of EUR 947.5 million, -1.5% as reported with underlying revenue 2.4%^(1,2) lower than H1 2019
• Adjusted EBITDA^([3]) of EUR 582.0 million, -2.3% as reported (-3.5% at constant FX⁽²⁾) compared with H1 2019 and representing an Adjusted EBITDA⁽³⁾ margin of 61.4% including a 2.2% year-on-year reduction in recurring operating expenses

Limited COVID-19 impact in H1 reflecting business resilience with measures in place to mitigate increased headwinds in H2 2020

• Updated FY 2020 group revenue outlook to EUR 1,860 – 1,900 million^([4]) in view of expected COVID-19 related revenue development  
• FY 2020 Adjusted EBITDA⁽³⁾ outlook now EUR 1,120 – 1,160 million⁽⁴⁾ including EUR 40 – 60 million of ‘exceptional’ COVID-specific cost mitigation measures implemented to protect the bottom line

Substantially increased visibility of USD 3.97 billion in accelerated relocation payments from U.S. C-Band repurposing and now fully included in SES’ financial projections for the first time

• Full execution of transition plan underway following unanimous election to accelerate clearing by satellite operators with total clearing costs of USD 1.6 billion and more than USD 1.5 billion expected to be reimbursed from mid-2021
• First relocation proceeds (linked to success milestone in Q4 2021) to be utilised to strengthen balance sheet with final proceeds (linked to success milestone in Q4 2023) to be used for a mix between return to shareholders, strong balance sheet and any disciplined value-accretive investment

Networks business set to deliver long-term growth through deployment of SES-17 and an enhanced O3b mPOWER constellation

• EUR 1.8 billion of growth CapEx (2020-2024), including four additional O3b mPOWER satellites^([5]), de-risking overall investment through launch resilience, enhanced launch cadence, improved constellation efficiency and meaningful expansion in coverage and throughput. Agreement with Boeing to collaborate in the development of commercially based solutions for Government customers
• EUR 550 million of CapEx deferred from 2020-2021 and total CapEx (2020-2024) flat, both as compared with March 2020 forecast

Significant progress on ‘Simplify & Amplify’ transformation programme 

• On track to deliver EUR 40 – 50 million of Simplify & Amplify related recurring annual EBITDA optimisations from 2021 with significant steps taken in the second quarter to reduce footprint, delayer, increase efficiency and remove positions across the organisation

Strong balance sheet, strong liquidity and a disciplined financial policy

• Adjusted Net Debt to Adjusted EBITDA⁽³⁾ ratio 3.3 times^([6]) consistent with SES’ commitment to investment grade
• Successful EUR 400 million Euro bond reduces future interest cost and ensures no significant senior debt maturities before 2023

[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

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

[5] Total incremental investment of EUR 480 million of which EUR 250 million over the period of 2020-2024 with the remaining balance thereafter

[6] Treats the hybrid bonds as 50% debt and 50% equity, per the rating agency methodology