First quarter revenues of 385 million, 0.7% like-for-like
Order backlog of 5.4 billion, 3.6 years of revenues
All financial objectives confirmed for current and next two years
Paris, 27 October 2016 - Eutelsat Communications (ISIN: FR0010221234 - Euronext Paris: ETL) today reported revenues for the first quarter ended 30 September 2016.
Three months to 30 September 2016
In millions Q1 2015-16 Q1 2016-17 Actual change Like-for-like change[1]
Video Applications 229.4 224.3 -2.2% -1.3%
Data Services 58.8 56.8 -3.3% -2.8%
Value-Added Services 29.7 29.4 -1.0% 8.3%
Government Services 53.0 47.1 -11.2% -10.7%
Other revenues 16.7 27.1 61.8% 62.9%
Sub-total 387.7 384.8 -0.7% 0.7%
Non-recurring revenues - - - -
Total 387.7 384.8 -0.7% 0.7%
EUR/USD exchange rate 1.105 1.112 - -
Commenting on the First Quarter, Rodolphe Belmer, CEO, said: First quarter revenues were fully in line with our expectations, and we are on track to meet our objectives for the full year. We have made a number of important steps along our new strategic roadmap, notably the procurement of the EUTELSAT 5 West B satellite under the design-to-cost' policy, generating significant capex savings, as well as progress on non-core asset disposals with Hispasat and Wins. On the operational side, I would highlight the rapid execution of the rationalization of distribution at the HOTBIRD orbital position and the strong renewal rate with the US Department of Defense during the Fall round,confirming the stabilisation in Government Services. In connectivity, we have seen a number of positive developments including the launch of the Russian broadband service on EUTELSAT 36C, the securing of capacity enabling us to launch our African broadband initiative with limited delay despite the loss of the Ka payload on AMOS-6 satellite, and the signing of several contracts for in-flight connectivity highlighting the quality of our in-orbit resources.
We are focused on optimising the revenue potential of our existing assets and maximising discretionary free-cash-flow generation, and we are working on additional measures to this end, notably operating cost savings, with the objective of reducing leverage, investing selectively in future growth opportunities and delivering an attractive shareholder remuneration
RECENT HIGHLIGHTS
Since the beginning of the current financial year, progress has been made on several key components of the new strategic roadmap communicated on 27 June 2016.
Financial:
Further asset disposals were undertaken with the disposal of the 70% stake in Wins/DHI, a non-core business in maritime mobility, and the exercise of the put option on the 34% stake in Hispasat as a precursor to the divestment of the stake;
The EUTELSAT 5 West B satellite was procured with significant capex savings, thanks to the Application of the design-to-cost' policy;
Operational:
Moreover, EUTELSAT 5 West A's C-band mission, serving mainly Data customers in Sub-Saharan Africa, will be discontinued, in line with the strategy of limiting investments in the Data vertical.
In Video, the rationalisation of distribution at the HOTBIRD orbital position has been completed in order to protect the value of this hotspot and stimulate HD and UHD ramp-up;
In Broadband, the Russian broadband service on the EUTELSAT 36C satellite has been launched, with a distribution agreement secured with Tricolor TV. Elsewhere, we have secured Ka capacity via a deal with Yahsat which will enable us to launch our African broadband initiative with only a slight delay, and allow us to recover the potential revenue losses resulting from the loss of the capacity on the AMOS-6 satellite in FY 2017-18 and FY 2018-19.
In Mobile Connectivity, contracts were signed for in-flight Connectivity, highlighting the quality of the Group's in-orbit resources as well as the strong potential of this market: SAS and Finnair will use capacity on the KA-SAT satellite to connect their short and medium-haul fleets.
In Government Services the renewal rate with the US Department of Defense during the Fall campaign exceeded expectations, confirming the stabilisation of this vertical.
[2]
Total revenues for the First Quarter ending 30 September 2016 stood at 384.8 million, up 0.7% like-for-like. On a reported basis, revenues were down 0.7% reflecting a 1.2 point negative perimeter effect (disposal of Alterna'TV and Wins/DHI[3]) and a 0.3 point negative currency effect (depreciation of the dollar relative to the euro).
VIDEO APPLICATIONS (63% of revenues)
First quarter revenues for Video Applications amounted to 224.3 million, down 1.3% like-for-like. This reflected on one hand additional revenues generated by incremental capacity launched last year (EUTELSAT 8 West B in MENA and EUTELSAT 36C in Sub-Saharan Africa) and, on the other, lower revenues at the HOTBIRD position mainly related to the rationalisation of empty capacity in the hands of resellers, as well as lower revenues in professional Video.
At 30 September 2016, the total number of channels broadcast on the Eutelsat fleet stood at 6,336, up 8.2% year-on-year. HD penetration continued to grow, at 940 channels, up from 721 a year earlier andrepresenting 14.8% of total channel-count compared to 12.3%.
DATA SERVICES (16% of revenues)
First quarter revenues for Data Services stood at 56.8 million, down by 2.8% like-for-like. This reflected on one hand the full-quarter contribution of the Ka-band payload on EUTELSAT 65 West A which entered into service in May, and on the other, the early termination of the contract for Ka-band capacity on EUTELSAT 3B in December 2015 as well as the ongoing tough environment for this application in all geographies.
VALUE-ADDED SERVICES (8% of revenues)
First quarter revenues for Value-Added Services amounted to 29.4 mil
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First quarter revenues of 385 million, 0.7% like-for-like
