SES GLOBAL S.A.: Solid First Half Poised For Profitable Growth
(EMAILWIRE.COM, September 20, 2004 ) SES GLOBAL, the world’s leading satellite operator (Euronext Paris, Luxembourg and Frankfurt Stock Exchanges: SESG), announces consolidated results for the six months to 30 June 2004.
The results for the period are in line with our guidance and additionally benefit from the release of tax provisions associated with organisational restructuring.
HIGHLIGHTS
• Revenues of EUR 593 million (2003: EUR 642 million) reflect a weaker US dollar and lower contribution by one-time items. Recurring revenues at constant exchange rate and on the same scope are 1.1% ahead;
• EBITDA of EUR 440 million (2003: EUR 515 million) reflects the impact of the weaker US dollar, one-time items and marketing costs in the service provision businesses. Whereas the gross EBITDA margin declined to 74%, the margin in the Group’s primary infrastructure provision segment remains close to 80%;
• Profit of the Group rises 41% from EUR 115 million to EUR 162 million, largely due to the release of tax provisions;
• Video broadcasting services show improving growth;
• Contract backlog rises 8% to EUR 6.9 billion;
• Two satellites, AMC-10 and AMC-11, successfully launched;
• Secondary Offering and listing on Euronext Paris raises free float to 35%.
Romain Bausch, President & CEO, commented, “The first six months of the year were very much as we had expected. For the full year, recurring revenues on a constant exchange rate basis are projected to be unchanged from the 2003 level, and Profit of the Group will also be at the prior year level. The record launch programme of five satellites this year will lead to high capital expenditures in 2004. Nonetheless these expenditures will be fully financed by operating cash flow.”
“ While 2004 is a year of transition, SES GLOBAL is in very good shape as we move towards 2005. In 2005 and 2006, our revenues are forecast to deliver strong growth, our principal markets are improving, and our financial position is very solid. SES GLOBAL will continue to invest in attractive growth opportunities, while still generating increasing levels of free cash flow in the coming years, allowing us to consider increasing total returns to shareholders.”
Overview
During the first half of the year, SES GLOBAL has achieved good operational and financial results in what has still been a relatively slow market. The results are consistent with the guidance given earlier in the year and demonstrate the stability of our business. Gross revenues declined, as forecast, mainly due to the weaker US dollar and the absence of one-time items, while same scope recurring revenues grew by 1.1% at constant exchange rate. The Group EBITDA margin declined, as forecast, due to a combination of one-time items and marketing costs associated with the development of service businesses, but remains strong around 80% in our primary infrastructure provision segment. Operating expenses rose in the period, mainly driven by one-time costs, including cost of sales relating to SIRIUS 2 transaction revenues and marketing costs in service businesses which will drive transponder demand. A Group restructuring has also resulted in the release of deferred tax provisions.
During the period we continued to develop the business. Following the sale of SES AMERICOM’s interest in the SIRIUS 2 satellite, we raised our interest in NSAB to 75%, enabling full integration of the company’s European operations within SES ASTRA. We acquired Verestar in the US, which will be fully integrated into SES AMERICOM following regulatory approval and which will expand the AMERICOM Government Services business.
The majority of our business is dedicated to serving the higher-value video broadcasting markets and these will continue to grow as the market evolves. High Definition Television (HDTV) services are gaining momentum in the US. In Europe, where HDTV broadcasting is in its infancy, a number of major broadcasters have confirmed their plans to introduce HDTV services in the next couple of years. The larger bandwidth requirement for broadcasting HDTV is a strong growth driver.
The successful launch during the first half of two replacement satellites for SES AMERICOM’s HD-PRIME neighbourhood will be followed by three more launches towards the end of this year, including the AMC-15 and AMC-16 satellites dedicated to serving EchoStar, as well as WSAT-2 providing coverage of North America, South America, Europe and Africa.
New contracts signed in the period have raised the Group’s contract backlog from EUR 6.4 billion at the end of 2003 to EUR 6.9 billion at June 30, 2004.
Outlook
The outlook is bright for SES GLOBAL. The launch of new satellites and the increase of our backlog underpins our expectations of double-digit percentage growth in revenues in each of 2005 and 2006. The majority of these revenues are from the provision of capacity for video broadcasting.
We will still see a further decline of the Group’s EBITDA margin in the second half of 2004 bringing the full year margin percentage towards the low 70’s, consistent with the guidance given earlier in the year. In the mid-term the Group’s EBITDA margin percentage is expected to rise from the low to the mid 70’s primarily due to the growth of our core video broadcasting business and the related favourable impact on EBITDA.
The combination of increasing revenues and thus improved levels of EBITDA and operating profit, as well as investment in selected growth opportunities, will support the generation of increasing levels of free cash flow.
SES GLOBAL’s management team is dedicated to delivering shareholder value, and will deliver this by developing the business through investments which meet our demanding rate of return criteria; reviewing our capital structure; and by returning cash to shareholders, through our progressive dividend policy and potential share buybacks.
For further information please contact:
Mark Roberts
Investor Relations
Tel. 352 710 725 490
Mark.Roberts@ses-global.com
Yves Feltes
Press Relations
Tel. 352 710 725 311
Yves.Feltes@ses-global.com
The results for the period are in line with our guidance and additionally benefit from the release of tax provisions associated with organisational restructuring.
HIGHLIGHTS
• Revenues of EUR 593 million (2003: EUR 642 million) reflect a weaker US dollar and lower contribution by one-time items. Recurring revenues at constant exchange rate and on the same scope are 1.1% ahead;
• EBITDA of EUR 440 million (2003: EUR 515 million) reflects the impact of the weaker US dollar, one-time items and marketing costs in the service provision businesses. Whereas the gross EBITDA margin declined to 74%, the margin in the Group’s primary infrastructure provision segment remains close to 80%;
• Profit of the Group rises 41% from EUR 115 million to EUR 162 million, largely due to the release of tax provisions;
• Video broadcasting services show improving growth;
• Contract backlog rises 8% to EUR 6.9 billion;
• Two satellites, AMC-10 and AMC-11, successfully launched;
• Secondary Offering and listing on Euronext Paris raises free float to 35%.
Romain Bausch, President & CEO, commented, “The first six months of the year were very much as we had expected. For the full year, recurring revenues on a constant exchange rate basis are projected to be unchanged from the 2003 level, and Profit of the Group will also be at the prior year level. The record launch programme of five satellites this year will lead to high capital expenditures in 2004. Nonetheless these expenditures will be fully financed by operating cash flow.”
“ While 2004 is a year of transition, SES GLOBAL is in very good shape as we move towards 2005. In 2005 and 2006, our revenues are forecast to deliver strong growth, our principal markets are improving, and our financial position is very solid. SES GLOBAL will continue to invest in attractive growth opportunities, while still generating increasing levels of free cash flow in the coming years, allowing us to consider increasing total returns to shareholders.”
Overview
During the first half of the year, SES GLOBAL has achieved good operational and financial results in what has still been a relatively slow market. The results are consistent with the guidance given earlier in the year and demonstrate the stability of our business. Gross revenues declined, as forecast, mainly due to the weaker US dollar and the absence of one-time items, while same scope recurring revenues grew by 1.1% at constant exchange rate. The Group EBITDA margin declined, as forecast, due to a combination of one-time items and marketing costs associated with the development of service businesses, but remains strong around 80% in our primary infrastructure provision segment. Operating expenses rose in the period, mainly driven by one-time costs, including cost of sales relating to SIRIUS 2 transaction revenues and marketing costs in service businesses which will drive transponder demand. A Group restructuring has also resulted in the release of deferred tax provisions.
During the period we continued to develop the business. Following the sale of SES AMERICOM’s interest in the SIRIUS 2 satellite, we raised our interest in NSAB to 75%, enabling full integration of the company’s European operations within SES ASTRA. We acquired Verestar in the US, which will be fully integrated into SES AMERICOM following regulatory approval and which will expand the AMERICOM Government Services business.
The majority of our business is dedicated to serving the higher-value video broadcasting markets and these will continue to grow as the market evolves. High Definition Television (HDTV) services are gaining momentum in the US. In Europe, where HDTV broadcasting is in its infancy, a number of major broadcasters have confirmed their plans to introduce HDTV services in the next couple of years. The larger bandwidth requirement for broadcasting HDTV is a strong growth driver.
The successful launch during the first half of two replacement satellites for SES AMERICOM’s HD-PRIME neighbourhood will be followed by three more launches towards the end of this year, including the AMC-15 and AMC-16 satellites dedicated to serving EchoStar, as well as WSAT-2 providing coverage of North America, South America, Europe and Africa.
New contracts signed in the period have raised the Group’s contract backlog from EUR 6.4 billion at the end of 2003 to EUR 6.9 billion at June 30, 2004.
Outlook
The outlook is bright for SES GLOBAL. The launch of new satellites and the increase of our backlog underpins our expectations of double-digit percentage growth in revenues in each of 2005 and 2006. The majority of these revenues are from the provision of capacity for video broadcasting.
We will still see a further decline of the Group’s EBITDA margin in the second half of 2004 bringing the full year margin percentage towards the low 70’s, consistent with the guidance given earlier in the year. In the mid-term the Group’s EBITDA margin percentage is expected to rise from the low to the mid 70’s primarily due to the growth of our core video broadcasting business and the related favourable impact on EBITDA.
The combination of increasing revenues and thus improved levels of EBITDA and operating profit, as well as investment in selected growth opportunities, will support the generation of increasing levels of free cash flow.
SES GLOBAL’s management team is dedicated to delivering shareholder value, and will deliver this by developing the business through investments which meet our demanding rate of return criteria; reviewing our capital structure; and by returning cash to shareholders, through our progressive dividend policy and potential share buybacks.
For further information please contact:
Mark Roberts
Investor Relations
Tel. 352 710 725 490
Mark.Roberts@ses-global.com
Yves Feltes
Press Relations
Tel. 352 710 725 311
Yves.Feltes@ses-global.com
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