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Eutelsat Communications: First Quarter 2015-16 Revenues up 2.0% at Constant CurrencyRegulatory News: Eutelsat Communications (Paris:ETL) (ISIN: FR0010221234 - Euronext Paris: ETL) today reported revenues for the first quarter ended 30 September 2015. Three months to 30 September 2015
Commenting on the First Quarter, Michel de Rosen, Chairman and CEO, said: "Eutelsat's first quarter revenues were up 2.0% at constant currency and put us on track to deliver on our full-year objectives. The entry into service of EUTELSAT 8 West B and EUTELSAT 115 West B will bring new capacity during the second quarter, which will ramp-up as the year progresses. We have taken major steps to position ourselves to grasp the significant opportunities on the African Broadband market with the lease AMOS-6 Ka-band payload in partnership with Facebook and the procurement of a follow-on standalone high throughput satellite for Africa." RECENT OPERATING HIGHLIGHTS The Group has had several recent contract successes in Video and Data applications in all geographies, which are detailed later in this release. Early October saw the entry into service of two new satellites: EUTELSAT 8 West B, boosting coverage of the MENA region, followed by EUTELSAT 115 West B which started operations ahead of schedule and brings additional resources to meet demand in LATAM. Eutelsat's African Broadband initiative was kicked off with the lease of the AMOS-6 Ka-band payload in partnership with Facebook and the subsequent procurement of a follow-on standalone High Throughput Satellite to serve the African market. Finally, as part of its initiatives to advance the adaptation of the satellite industry to evolving video landscapes, Eutelsat along with SES, launched 'Future Video Initiative' to develop and promote next-generation video technologies, standards and formats. FIRST QUARTER REVENUE ANALYSIS1 Total revenues for the first quarter ending 30 September 2015 stood at €387.7 million, up 2.0% at constant currency. The appreciation of the dollar relative to the euro added 6.4 points to top-line growth, particularly visible in Government Services and to a lesser extent in Data Services. VIDEO APPLICATIONS (62% of revenues) First quarter revenues for Video Applications amounted to €229.4 million, down 1.6% at constant currency. This mainly reflected on one hand a good performance at Eutelsat Americas and higher revenues at 16° East (Sub-Saharan Africa and Central Europe) and 7° East (Turkey and East Africa) and on the other, lower revenues at the HOT BIRD position following the non-renewal of contracts with some service providers last year and the impact of contract renegotiations with Russian customers. New capacity entered into service in October should ramp-up as the year progresses. At 30 September 2015, the total number of channels broadcast by Eutelsat satellites stood at 5,855, up 1.2% year-on-year. HD penetration continued to increase, representing 12.3% of channels compared to 10.9% a year earlier, or 721 channels, up from 629 a year earlier. Several recent video contracts have been announced in both mature and fast growing markets:
DATA SERVICES (16% of revenues) First quarter revenues for Data Services stood at €58.8 million, almost unchanged year-on-year at constant currency (-0.3%). Growth was driven by Latin America and the ramp-up of regular capacity on EUTELSAT 3B. Revenues were lower at 53° East as a result of the rationalization of capacity at this position in May 2015. As in previous quarters, pricing pressure remains strong in EMEA. Recent contracts include multi-year / multi-transponder agreements signed by Eutelsat Americas across Latin America for capacity with Elara (at 115° and 117° West) and with Axesat (at 113° and 115° West). VALUE-ADDED SERVICES (8% of revenues) First quarter revenues for Value-Added Services amounted to €29.7 million, up 12.4% year-on-year. Uptake on KA-SAT continued, with 190,000 broadband terminals activated at 30 September 2015, compared with 166,000 a year earlier and 185,000 as of 30 June 2015. Maritime mobility also contributed to year-on-year growth. GOVERNMENT SERVICES (14% of revenues)
First quarter revenues for Government Services stood at
€53.0 million versus €44.5 million a year earlier. At constant currency
this represented a decline of -0.7%. The quarter saw the early
termination of a significant contract with a distributor, with the
attendant termination fee recognized in 'Other revenues', and continued
to reflect the effect of lower renewals in the last 12 months. These
elements were partially offset by new contracts, in particular in
Asia-Pacific. OTHER AND NON-RECURRING REVENUES Other revenues2 amounted to €16.7 million in the first quarter compared with €8.0 million last year and included revenues related to the agreements signed in 2014 with SES at 28.5° East as well as the early termination fee mentioned above. There were no non-recurring revenues in the first quarter. OPERATIONAL AND LEASED TRANSPONDERS The number of operational 36 MHz-equivalent transponders stood at 1,175 at 30 September 2015, broadly stable compared to 30 September 2014, reflecting on the one hand the reduction in capacity at 53° East and 56° East and on the other the relocation of EUTELSAT 28A to 33°East. The fill rate stood at 77.6%, slightly up on a year-on-year basis. The decline compared to the fill rate of 78.7% at end June 2015, mostly reflects the early termination of a significant contract with a distributor in Government Services. The number of operational high throughput spotbeams stood at 87 as of 30 September 2015, unchanged compared to end-June 2015.
Note: Based on 36 MHz-equivalent transponders excluding high throughput capacity (KA-SAT 82 spotbeams and EUTELSAT 3B 5 Ka-band spotbeams). ORDER BACKLOG The order backlog5 stood at €6.0 billion at 30 September 2015, versus €6.3 billion a year earlier and €6.2 billion at end June 2015. In the first quarter, backlog consumption and the impact of the early termination mentioned above offset the impact of new contracts notably at 3° East (CANAL+ Overseas) and 28° East (Arqiva). The backlog was equivalent to 4.1 times 2014-2015 revenues. Video Applications represented 83% of the backlog.
OUTLOOK Based on the performance of the first quarter, Eutelsat remains on track to achieve its objective of revenue growth of 2-3% for FY 2015-16 at constant currency, excluding non-recurring revenues. All other targets published on 30 July 2015 are also confirmed. FLEET DEVELOPMENTS NOMINAL LAUNCH PROGRAM The upcoming launch schedule is indicated below. Changes relative to the last quarterly update on 30 July 2015 are as follows:
CHANGES IN THE FLEET In July 2015, EUTELSAT 28A was relocated to 33° East where it now operates as EUTELSAT 33C. On 20 August 2015, the EUTELSAT 8 West B satellite was successfully launched into orbit by an Ariane 5 rocket. It entered full commercial service at 7/8° West in early October. The EUTELSAT 8 West A satellite was relocated at 12.5° West where it operates under the name EUTELSAT 12 West B; EUTELSAT 8 West C was relocated at 33° East and is now operating as EUTELSAT 33D. In October 2015, EUTELSAT 115 West B started operations a month ahead of the original date. In October 2015, the operational life of EUTELSAT 33B was terminated, a month ahead of its planned de-orbiting following the loss of its second solar array. Continuity for customers was assured by other capacity on Eutelsat's fleet. Following these fleet movements, the number of satellites operated by Eutelsat stood at 38 as of today's publication. LAUNCH CONTRACTS Eutelsat 65 West A will be launched by Arianespace (News - Alert) in the first quarter of calendar year 2016 as a dedicated launch (previously planned in the second half of calendar year 2016 as a double launch). Eutelsat also exercised an option for a future Arianespace launch and now has two future Ariane launches booked in addition to EUTELSAT 65 West A and EUTELSAT 172B. Elsewhere, Eutelsat has secured a multi-launch agreement with ILS for 2016-23 comprising several conditional launches. PROCUREMENT OF NEW CAPACITY In July 2015, the first satellite "Eutelsat Quantum" satellite was ordered from Airbus Defence and Space, to be delivered at the end of 2018. In October 2015 Eutelsat leased the Ka-band capacity on the AMOS-6 satellite that will enable broadband services to be delivered in Sub-Saharan Africa from end-2016. In October 2015, Eutelsat ordered a new-generation High Throughput Satellite from Thales (News - Alert) Alenia Space (TAS) with exceptional operational flexibility. To be launched in 2019, this all-electric satellite will bring significant additional broadband resources to Sub-Saharan Africa and will be the first to use Thales Alenia Space's new Spacebus Neo platform. GOVERNANCE In October 2015, Michel de Rosen informed the Board of Directors that he will step down from his position as Chief Executive Officer in March 2016. He will remain in the role of non-executive Chairman of the Board of Directors of Eutelsat until the end of his current mandate in November 2016, at which point his mandate will be submitted to the Annual Shareholders' Meeting for renewal. Eutelsat's Board of Directors elected Rodolphe Belmer as the successor to Michel de Rosen in the role of Chief executive Officer, effective from 1 March 2016. In order to create the conditions for a smooth transition process, he will join Eutelsat on 1 December 2015 as Deputy CEO, alongside Michel Azibert, Deputy CEO and Chief Commercial and Development Officer. Rodolphe Belmer will be proposed as a member of Eutelsat's Board at the Annual Shareholders' Meeting of November 2016. APPENDICES Quarterly reported revenues by business application
First quarter 2015-2016 revenues conference call A conference call will be held on Wednesday, 28 October 2015 at 6:30pm CET / 5.30pm GMT / 12:30 EST To connect to the call, please use the following numbers:
Access code: 512730# Instant replay number will be available from 28 October, 08.30 to November 4, midnight CET:
Access code: 297065# Financial calendar The financial calendar below is provided for information purposes only. It is subject to change and will be regularly updated.
Disclaimer The forward-looking statements included herein are for illustrative purposes only and are based on management's current views and assumptions. Such forward-looking statements involve known and unknown risks. For illustrative purposes only, such risks include but are not limited to: postponement of any ground or in-orbit investments and launches including but not limited to delays of future launches of satellites; impact of financial crisis on customers and suppliers; trends in Fixed Satellite Services markets; development of Digital Terrestrial Television and High Definition television; development of satellite broadband services; Eutelsat Communications' ability to develop and market Value-Added Services and meet market demand; the effects of competing technologies developed and expected intense competition generally in its main markets; profitability of its expansion strategy; partial or total loss of a satellite at launch or in-orbit; supply conditions of satellites and launch systems; satellite or third-party launch failures affecting launch schedules of future satellites; litigation; ability to establish and maintain strategic relationships in its major businesses; and the effect of future acquisitions and investments. Eutelsat Communications expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in this presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based, unless so required by applicable law.
1 The share of each application as a percentage of total
revenues is calculated excluding "other revenues" and "non-recurring
revenues". Unless otherwise stated, all growth indicators are made in
comparison with first quarter ended 30 September 2014.
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