Trading update: impact of Covid-19 crisis on Eutelsat's operations and financial objectives
09/04/2020
Business continuity
We have an active and capable remote working culture and we have responded quickly to ramp up our IT infrastructure to support both our employees and our operations. We have a well-rehearsed Business Continuity Plan for key workers in mission-critical posts, enabling our teleports and control centres to operate nominally and support our customers who are reliant on our services.
Impact of Covid-19 on revenues
Compared with many industries, our activity is highly resilient, characterized as it is by long-term contracts, a substantial backlog ( 4.3bn as of 31 December 2019, representing 3.3 years of revenues) and the criticality of our capacity for customers. This is especially true of our core broadcast business which represents over 60% of revenues.
Overall the impact on FY 2019-20 total revenues will be limited.
Nevertheless, certain verticals or sub-verticals are feeling the effects of the current crisis, particularly since mid-March. These include:
Occasional Use (circa 1% of Group revenues, included in the Professional Video vertical) which is impacted by the postponement or cancellation of sports and other events;
Mobile Connectivity (6% of Group revenues) which is affected by the impact on airline and maritime traffic;
And, to a lesser extent, Fixed Broadband (6% of Group revenues) which is experiencing a slowdown in gross adds in a context of more challenging customer gathering.
Revenues at the end of February were in line with our expectations; however, these effects will be progressively felt in the Third and Fourth quarters of the current Financial Year (2019-20), and are likely to be reflected at least into the early months of FY 2020-21, together with a more generalised slowdown in the pace of new business.
Elsewhere, the crisis is affecting the operations of other players in our supply chain, notably satellite manufacturers, launchers, and gateway installers, with the following impacts:
The launch of EUTELSAT QUANTUM, planned for the third quarter of calendar 2020, is likely to be delayed;
The deployment of ground gateways supporting the operations of EUTELSAT KONNECT is likely to be partially delayed.
In consequence the revenue ramp-up of these two expansion satellites will be pushed out. This will have no impact on revenues of the current fiscal year, but delays will affect our expectations for FY 2020-21.
Updated Financial outlook
In the light of the impact in the Third and Fourth Quarters, we estimate the risk to FY 2019-20 revenues resulting from the Covid-19 crisis is of the order of 20 million. In consequence we now expect revenues from the five operating verticals of around 1,250 million[1], compared with our previous expectation of revenues in the lower end of a range of 1,270 to 1,315 million[2]. This limited impact highlights the resilience of our overall activities.
We continue to assess the effect of the crisis on the outer years. While this is ongoing, we are temporarily suspending our objective of Discretionary Free-Cash flow of circa 500 million[3]in Fiscal year 2021-22, although we are confident our business will remain highly cash generative. An updated objective will be provided by the end of July.
With regard to the other elements of our financial outlook:
Cash Capex will remain at an average not exceeding 400[4] million per annum for the period July 2019 to June 2022;
We will continue to implement the LEAP 2 plan, aimed at generating 20 to 25 million in annual savings by Fiscal year 2021-22;
We maintain our objective of a sound financial structure to support our investment grade credit rating and will continue to aim at a medium-term net debt / EBITDA ratio around 3x.
As a measure of prudence and in order to preserve maximum financial flexibility during this uncertain period, we are also temporarily suspending our policy of a stable to progressive dividend'. The Board of Directors will recommend a dividend cut of 30% in respect of FY 2019-20 to the Annual General Shareholders meeting in November 2020. Our policy of a stable to progressive dividend will be resumed as soon as circumstances permit, based on our resilient cash-flow generation and robust financial health.
The share buyback program of at least 100 million by June 2022 was launched in March with a first tranche of 20 million by July 2020 which is well underway and will be completed in due time. The program will then be suspended until further notice.
Financial position
Eutelsat's financial profile is strong with:
A Net Debt to EBITDA ratio of 3.2x at end-December 2019 providing substantial headroom relative to the 4.0x Debt covenant on non-Bond Debt;
A well-spread refinancing schedule, with no maturities before June 2021 ( 500 million Bond);
A strong liquidity position at end December 2019 with cash of 373 million and undrawn credit lines of 798 million, of which 300 million were drawn in the course of March in order to give additional security;
A free-cash-flow generation which will remain strong.
Rodolphe Belmer, Chief Executive Officer of Eutelsat Communications, said: In this unprecedented context, our focus is on the health and well-being of our employees and wider communities and on ensuring full business continuity for our customers, at a time when the demand for high quality, reliable connectivity has never been higher.
Our activity is resilient compared
LINK: | http://news.eutelsat.com/pressreleases/trading-update-impact-of-covid-... |
See more stories from eutelsat |
More from Eutelsat
27/03/2024
ALOFT AeroArchitects equips private Boeing Business Jet aircraft with Eutelsat OneWeb's LEO satellite connectivity service
Photo credit: ALOFT AeroArchitects Press release - 27 March 2024 12:27 ALOFT...
26/03/2024
Eutelsat OneWeb services activated for enterprise and maritime in Australia and New Zealand through Sat One partnership
Photo credit: GETTY IMAGES Press release - 26 March 2024 11:29 Eutelsat OneW...
21/03/2024
Eutelsat and NEC XON seal agreement for Eutelsat OneWeb capacity for connectivity in sub-Saharan Africa
Press release - 21 March 2024 13:37 Eutelsat and NEC XON seal agreement for E...
20/03/2024
Perus IRTP (Instituto Nacional de Radio y Televisin del Per) chooses satellite streaming services via Eutelsat
Photo credit: Getty Images Press release - 20 March 2024 14:10 Peru s IRTP ...
19/03/2024
Eutelsat Group and Intelsat ink significant new deal for partnership on Eutelsat's OneWeb Low Earth Orbit Constellation
Photo credit: Eutelsat Group Press release - 19 March 2024 22:30 Eutelsat Gr...
29/02/2024
Eutelsat OneWeb LEO service supports Q-KON in enhancing digital banking services in southern Africa.
Photo credit : Getty Images Press release - 29 February 2024 17:40 Eutelsat...
26/02/2024
Eutelsat OneWeb launches Land Mobility' connectivity services
Photo credit: Eutelsat Group Press release - 26 February 2024 14:51 Eutelsat OneWeb launches Land Mobility' connectivity services Facebook LinkedIn T...
21/02/2024
Eutelsat Group's ADVANCE Maritime offer supporting Universal Satcom to consolidate and extend its service offering
Photo credit: Shutterstock Press release - 21 February 2024 11:07 Eutelsat ...
16/02/2024
SECOND QUARTER AND FIRST HALF 2023-24 RESULTS
Press release - 16 February 2024 07:41 SECOND QUARTER AND FIRST HALF 2023-24 RESULTS Facebook LinkedIn Twitter Download as PDF First Half operating vert...
16/02/2024
Eutelsat Group supports the launch of UNESCO s new television channel, Educa-TV
Photo credit: Getty Images Press release - 16 February 2024 15:17 Eutelsat Group supports the launch of UNESCO s new television channel, Educa-TV Facebook ...
15/02/2024
Eutelsat 7/8 West video hotspot leveraged by Tldiffusion d'Algrie to expand channel offering for audiences across Algeria
Photo credit: Getty Images Press release - 15 February 2024 15:21 Eutelsat 7...
12/02/2024
Telstra and Eutelsat OneWeb launch largest deployment of LEO backhaul in Australia
Copyright 2021 OneWeb. All rights reserved. Attribution: Google Earth Globe Imag...
02/02/2024
Eutelsat Group confirms end of operations on EUTELSAT 113 West A satellite
Press release - 2 February 2024 16:46 Eutelsat Group confirms end of operations on EUTELSAT 113 West A satellite Facebook LinkedIn Twitter Download as PD...
31/01/2024
Eutelsat Group and OmniAccess announce collaboration with motorsport's Extreme E for connectivity on board its supply ship St. Helena
Photo credit: Extreme E Press release - 31 January 2024 13:22 Eutelsat Group...
29/01/2024
Eutelsat Group Trading update
Press release - 29 January 2024 07:17 Eutelsat Group Trading update Facebook LinkedIn Twitter Download as PDF THIS ANNOUNCEMENT CONTAINS INSIDE INFORMAT...
29/01/2024
Eutelsat Group concludes sale of OneWeb's stake in Airbus OneWeb Satellites LLC (AOS)
Photo credit: OneWeb Press release - 29 January 2024 16:40 Eutelsat Group c...
23/01/2024
FRENCH TELEVISION LAUNCHES FRANCE 2 IN UHD ON DTT WITH IMMEDIATE NATIONWIDE COVERAGE VIA EUTELSAT GROUP SUBSIDIARY FRANSAT
Copyright (c) 2015 dotshock/Shutterstock Press release - 23 January 2024 11:15...
19/01/2024
Eutelsat OneWeb supports Paratus South Africa for the launch of its South Africa Connectivity Services
Photo credit: Shutterstock Press release - 19 January 2024 12:57 Eutelsat O...
12/01/2024
EUTELSAT GROUP REAFFIRMS ITS SUPPORT TO FONDATION AILES DE FRANCE IN PARTNERSHIP WITH CNES
Photo credit: SIRPA AIR Press release - 12 January 2024 17:34 EUTELSAT GROUP...
15/12/2023
Kymeta Hawk u8 is the First Flat Panel Antenna to be approved on Eutelsat OneWeb's LEO Network for land mobility
Launched in March 2023, Kymeta's compact, low-power HawkTM u8 LEO terminal, ...
15/12/2023
Kymeta Hawk u8, premire antenne plate homologue pour la mobilit terrestre sur le rseau LEO d Eutelsat OneWeb
Lanc en mars 2023, le terminal HawkTM u8 de Kymeta, compact et peu gourmand en ...
13/12/2023
Eutelsat OneWeb signs multi-million dollar exclusive distribution agreement with Rawafed Libya to deliver connectivity services across Libya
Photo credit: Eutelsat Group Press release - 13 December 2023 07:32 Eutelsat...
06/12/2023
Vivacom and Eutelsat Group launch fourth European Ground Station in Bulgaria
Photo credit: Courtesy of United Group Vivacom Press release - 6 December 2023 18:00 Vivacom and Eutelsat Group launch fourth European Ground Station in Bu...
05/12/2023
Eutelsat OneWeb to collaborate with Imperial College London to support critical research for space weather monitoring
Photo Credit: Martin Archer / Imperial Press release - 5 December 2023 10:36 ...
29/11/2023
Eutelsat OneWeb and Hanwha Systems sign distribution agreement for the delivery of satellite connectivity in South Korea
Photo credit: Shutterstock Press release - 29 November 2023 10:53 Eutelsat ...
21/11/2023
Eutelsat OneWeb first to receive approval from Indian space regulator for satellite broadband services
Photo credit: Shutterstock Press release - 21 November 2023 16:51 Eutelsat O...
16/11/2023
Offshore Link Sat (OLS) strengthens partnership with Eutelsat Group for maritime connectivity off Brazilian coast
Photo credit: Shutterstock Press release - 16 November 2023 11:40 Offshore L...
15/11/2023
Chunghwa Telecom selects Eutelsat OneWeb for Low Earth Orbit (LEO) satellite services
Photo credit: Dr. Chih-Cheng Chien, President, Network Technology Group, Chunghw...
15/11/2023
NEC XON AND EUTELSAT ONEWEB SIGN DISTRIBUTION AGREEMENT FOR LEO CAPACITY IN SUB-SAHARAN AFRICA
Photo credit: Shutterstock Press release - 15 November 2023 14:04 NEC XON A...
13/11/2023
France Tlvisions chooses Eutelsat for UHD broadcasting solution to terrestrial and satellite networks across France
Photo credit: Shutterstock Press release - 13 November 2023 12:12 France T ...
08/11/2023
MediaMobil to leverage Eutelsat Group capacity to deliver global maritime connectivity
Photo credit: Shutterstock Press release - 8 November 2023 10:52 MediaMobi...
27/10/2023
PSSI Global Services selects Eutelsat Group to expand Live sports content delivery over North America
Photo credit: Shutterstock Press release - 27 October 2023 18:00 PSSI Global...
26/10/2023
Successful entry into service of the EUTELSAT KONNECT VHTS satellite, driving connectivity growth
Photo credit: Toys Films Press release - 26 October 2023 07:30 Successful en...
26/10/2023
FIRST QUARTER 2023-24 REVENUES
Press release - 26 October 2023 07:34 FIRST QUARTER 2023-24 REVENUES Facebook LinkedIn Twitter Download as PDF Operating Verticals revenues of 273 mill...
19/10/2023
EUTELSAT GROUP ANNOUNCES AMBITIOUS TARGETS TO REDUCE ITS CARBON IMPACT AND FIGHT CLIMATE CHANGE
Photo credit: Adrien Daste / Eutelsat Press release - 19 October 2023 17:55 ...
10/10/2023
Marlink signs multi-year agreement on EUTELSAT 10B for maritime connectivity over EMEA
Image: Shutterstock Press release - 10 October 2023 09:00 Marlink signs mult...
06/10/2023
EUTELSAT 117 West A selected by TV Azteca for its video distribution over Mexico
Photo credit: Shutterstock Press release - 6 October 2023 19:22 EUTELSAT 117 West A selected by TV Azteca for its video distribution over Mexico Facebook ...
29/09/2023
EUTELSAT GROUP ANNOUNCES ADMISSION TO TRADING ON THE LONDON STOCK EXCHANGE
Eutelsat Group Press release - 29 September 2023 09:05 EUTELSAT GROUP ANNOUNCES ADMISSION TO TRADING ON THE LONDON STOCK EXCHANGE Facebook LinkedIn Twitte...
28/09/2023
EUTELSAT AND ONEWEB COMBINATION HERALDS NEW ERA IN SPACE CONNECTIVITY AS WORLD'S FIRST GEO-LEO OPERATOR
Press release - 28 September 2023 11:31 EUTELSAT AND ONEWEB COMBINATION HERAL...
26/09/2023
Eutelsat and Can Marine to Enhance Global Maritime Connectivity over Asia-Pacific region
Copyright: Shutterstock Press release - 26 September 2023 07:30 Eutelsat an...
19/09/2023
Eutelsat and Eurovision Services sign new long-term partnership to deliver Live sports events over Europe and MENA
Copyright: Shutterstock Press release - 19 September 2023 17:45 Eutelsat and...
16/09/2023
DAZN complements streaming with satellite delivery to homes across Italy via HOTBIRD
Copyright: SHUTTERSTOCK Press release - 16 September 2023 08:30 DAZN complem...
15/09/2023
wedotv launches FAST platform on Eutelsat's HOTBIRD satellites for audiences in Italy
Copyright: Shutterstock Press release - 15 September 2023 07:30 wedotv laun...
14/09/2023
Eutelsat and NationalChip Deliver Ground-Breaking Sat.tv Features on Popular Set-Top Box Chipset
Photo credit: SHUTTERSTOCK Press release - 14 September 2023 17:45 Eutelsat ...
13/09/2023
Successful entry into service of EUTELSAT HOTBIRD 13F and HOTBIRD 13G satellites
Photo credit: TOYS FILMS Press release - 13 September 2023 07:30 Successful entry into service of EUTELSAT HOTBIRD 13F and HOTBIRD 13G satellites Facebook ...
05/09/2023
Eutelsat partners with Karista s Spacetech fund
Photo credit: Shutterstock Press release - 5 September 2023 07:31 Eutelsat partners with Karista s Spacetech fund Facebook LinkedIn Twitter Download as...
21/08/2023
NOTICE OF ORDINARY AND EXTRAORDINARY GENERAL MEETING OF EUTELSAT SHAREHOLDERS
Press release - 21 August 2023 07:37 NOTICE OF ORDINARY AND EXTRAORDINARY GENERAL MEETING OF EUTELSAT SHAREHOLDERS Facebook LinkedIn Twitter Download as P...
07/08/2023
Eutelsat and Thaicom to Partner for New Software-Defined Satellite over Asia
Press release - 7 August 2023 07:00 Eutelsat and Thaicom to Partner for New Software-Defined Satellite over Asia Facebook LinkedIn Twitter Download as PD...
07/08/2023
AVS Leverages Optimum Coverage of EUTELSAT 65 West A Satellite over Brazil to Expand Its Broadcast Services
EUTELSAT 65 West A _ Credit: TOYS Film Press release - 7 August 2023 17:46 ...
28/07/2023
FULL YEAR 2022-23 RESULTS
Photo credit: Agency R.E.A. Press release - 28 July 2023 07:33 FULL YEAR 2022-23 RESULTS Facebook LinkedIn Twitter Download as PDF All Full Year 2022-2...