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Solid First Half financial performance
• Revenue of €899 million (+2.8% YOY as reported) and Adjusted EBITDA(1) of €545 million (flat YOY as reported)
• Important renewals in Video (-5.1% YOY including periodic(2)) underpin Full Year outlook
• Revenue expansion in Q2 2022 driving Networks growth (+2.1% YOY(2)) and supporting Full Year growth expectation
• Adjusted Net Profit improved by 11% YOY to €168 million, while leverage reduced to 3.0 times(3)

On track to deliver robust 2022 Revenue and EBITDA and drive long-term value from differentiated growth investments
• Over 90% of 2022 Group Revenue outlook (€1,750-1,810 million(4)) under contract; 2022 Adjusted EBITDA outlook also on track
• $930 million(5) of gross backlog for SES-17 (now in service) & O3b mPOWER (progressing towards service introduction in Q2 2023)
• $450 million DRS GES acquisition completed expanding revenue base in profitable and growing Government segment

Important milestones achieved in US C-band clearing
• First satellite (SES-22) successfully launched and now in service; Phase 2 clearing on track
• Over $520 million of cost reimbursements received to date via the clearinghouse process
• Additional clearing for Verizon over 50% complete; expect to complete in H2 2022 to earn up to $170 million (gross) payments

Steve Collar, CEO of SES, commented: “I am pleased with our H1 2022 results reflecting solid execution across the business and affirming that we are fully on track to deliver on our full year revenue and EBITDA outlook.

Our Networks business delivered growth of 2% year-on-year and this trajectory will be further strengthened by important wins with ARSAT and AXESS Networks, agreements signed with Explora Journeys and another leading cruise provider reinforcing our leading position in cruise, and the entry into service of SES-17 which is now operational and delivering commercial services to customers.

We have closed the acquisition of DRS GES, allowing us to combine the best-in-class Government solutions provider together with our state-of-the-art multi-orbit satellite networking capabilities at SES Government Solutions and expanding our value proposition towards US Government end users. The combination is compelling in view of our leadership in Medium Earth Orbit and the highly differentiated capabilities of the O3b mPOWER constellation, launching in Q4 with service introduction during the second quarter of 2023.

We secured several important renewals at our core video neighbourhoods in the first half and, with limited contract maturities in the second half, have clear line of sight to our full year revenue outlook, with first half performance complemented by growth in our HD+ and Sports & Events businesses.

Finally, our C-band clearing is proceeding well with the successful launch of SES-22, the first significant reimbursement payment received, and we are well on track to capture the $170 million of gross cash proceeds from our additional C-band agreement with Verizon.”

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.

• H1 2022 underlying revenue (excluding periodic and other) was 3.3% lower year-on-year at €888 million.
• Video underlying revenue of €501 million represents a reduction of 7.0% year-on-year including the planned impact of lower US wholesale revenue. Excluding US wholesale, Video was 4.8% lower than H1 2021 as lower volumes in mature markets were partially offset by growth in HD+ and Sports & Events. Including periodic revenue of €10 million in Q1 2022, overall Video revenue was 5.1% lower compared with H1 2021.
• At 30 June 2022, SES delivers 8,028 total TV channels to 366 million TV homes around the world, including 3,092 High Definition TV channels. 72% of total TV channels are broadcast in MPEG-4 with an additional 6% broadcast in HEVC.
• Networks underlying revenue of €387 million represented a growth of 2.1% year-on-year compared with H1 2021 with growth in Mobility (of +16.0%) and Fixed Data (of +2.8%), while the rapid US withdrawal from Afghanistan in Q3 2021 contributed to lower Government (-7.5%) albeit with new business wins in Global Government supporting positive quarter-on-quarter performance.
• Adjusted EBITDA of €545 million represented an Adjusted EBITDA margin of 60.6% (H1 2021: 62.2%) including recurring operating expenses of €354 million. Adjusted EBITDA excludes US C-band operating expenses (net of reimbursement income) of €13 million (H1 2021: €12 million) and other significant special items of €3 million (H1 2021: €6 million).
• Adjusted Net Profit (as reported) improved to €168 million including a 12.4% reduction in net interest expense, net foreign exchange gain of €26 million (H1 2021: €20 million gain), and income tax expense of €27 million (H1 2021: €20 million expense).
• At 30 June 2022, Adjusted Net Debt (including 50% of the €1,175 million of hybrid bonds as debt) was €3,310 million (down 9.5% compared with 30 June 2021) and represented an Adjusted Net Debt to Adjusted EBITDA ratio of 3.0 times. In June 2022, SES launched and priced a bond offering of €750 million senior unsecured fixed rate notes due in 2029 with a coupon of 3.5% and, because of the transaction, SES now has no senior debt maturities to be refinanced until 2024.
• Contract backlog at 30 June 2022 was €5.1 billion (€5.8 billion gross backlog including backlog with contractual break clauses).
• 2022 group revenue and Adjusted EBITDA outlook (assuming an FX rate of €1=$1.13, nominal satellite health, and nominal launch schedule) is unchanged and expected to be between €1,750-1,810 million and between €1,030-1,070 million respectively.
• On 1 August 2022, SES completed the acquisition of DRS Global Enterprise Solutions (GES) for $450 million, having obtained the necessary regulatory approvals.
• Capital expenditure (net cash absorbed by investing activities excluding acquisitions, financial investments, and US C-band repurposing) outlook is also unchanged and expected to be €950 million in 2022 with an average of €460 million for 2023-2026.
• In March 2022, SES secured an agreement to expand access for Verizon Communications to the 3700-3800 MHz C-band block in certain US markets beyond those cleared in Phase I and earlier than the deadline for Phase II clearing. SES will earn additional payments of up to $170 million (pre-costs), subject to delivering the clearing on the agreed timeline. During Q2 2022, SES completed the first part of this clearing and expects to receive a portion of the total payment during H2 2022.

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 which refers to comparative figures restated to neutralise currency variations
3 Ratio of Adjusted Net Debt (including 50% of the €1.175 billion of hybrid bonds as debt) to Adjusted EBITDA
4 Financial outlook assumes a €/$ FX rate of €1 = $1.13, nominal satellite health, and nominal launch schedule
5 Gross backlog $930 million (fully protected: $685 million)