Eutelsat Communications First Quarter 2011-2012 Revenues UP 3.4% on Track to Meet Full Year Objectives

Nov 03, 2011, 13:48 ET from Eutelsat Communications

PARIS, November 3, 2011 /PRNewswire/ --

  • First quarter revenues:  €295.4 million, up 3.4% (+5.5% at constant currencies)
  • Two recent launch successes:  New capacity to support growth in fast developing markets:
    • ATLANTIC BIRD™ 7 entry into service 23 October, enhanced coverage of Middle East and North Africa broadcast markets
    • W3C to enter into service 9 November, serving broadcast markets in Central Europe, Indian Ocean islands and data markets in Europe, Africa, the Middle East and Central Asia
  • Accelerated top-line growth expected in the second half of the year
  • Positive Outlook: Current fiscal year and three-year targets confirmed

Eutelsat Communications (ISIN: FR0010221234 - Euronext Paris: ETL), one of the world's leading satellite operators, today reported revenues for the first quarter ended September 30, 2011.

                                             First quarter ended
    Business applications                       September 30
    In millions of euros                        2010         2011    Change
    Video Applications                         195.5        198.2     +1.4%
    Data & Value Added Services                 58.9         59.6     +1.2%
    Multi-usage                                 28.8         36.2    +25.9%
    Other revenue                                2.4          1.3      N/S
    Non-recurring revenue                         --           --       --
    Total                                      285.6        295.4     +3.4%


Note: Unless otherwise stated, all growth indicators or comparisons are made against the first quarter of the previous fiscal year or September 30, 2010. The share of each application as a percentage of total revenues is calculated excluding "other revenues" and "non-recurring revenues".

Commenting on the first quarter, Michel de Rosen, Eutelsat CEO said, "Eutelsat generated revenue growth of 3.4% in the first quarter. This reflects a temporary transitional period for the Group until current capacity constraints, resulting from two years of stronger than expected up-take of our in-orbit resources, are alleviated. Two new satellites, ATLANTIC BIRD™ 7 and W3C, will enter into full commercial service during the second quarter. Both of these satellites cover fast-growing video markets including the Middle East, North Africa and Central Europe.  The W3C satellite will also significantly expand our capacity to serve data markets in Europe, Africa, the Middle East, and Central Asia.

The availability of these replacement and expansion resources, and a further five satellites to be launched between now and June 2014, will enable us to meet continued solid underlying demand in our markets. We therefore confirm our revenue target for the current year of above €1,235 million, and of above 7% CAGR for the 2011-2014 outlook period accompanied by an EBITDA margin of above 77%."  

FIRST QUARTER 2011-2012 REVENUE ANALYSIS

First quarter revenues stood at €295.4, million up 3.4% despite limited available in-orbit Ku-band capacity. At constant currencies, revenues would have increased 5.5%.

VIDEO APPLICATIONS (67.4% of revenues)

Revenues from Video Applications rose 1.4% to €198.2 million. This result reflects capacity constraints occasioned by the rapid take-up of in-orbit capacity that became available in 2009-2010, and the 12 month delay in the arrival of new capacity at 16° East following the non-availability of the W3B satellite. Moreover, the first quarter of the previous year benefitted in part from an exceptional boost from broadcasting of the World Cup Soccer tournament.

The number of TV channels across Eutelsat's fleet continued to increase, demonstrating the dynamism of television broadcasting. At September 30, 2011, Eutelsat's fleet was transmitting a total of 3,952 television channels, up 252, from 3,700 last year. The number of channels broadcast in High Definition reached 239, up 24%, from 192.  

Significant channel growth was recorded at two key video neighbourhoods which benefitted from the availability of new resources during the 2009 and 2010 period:

  • 7° West, with coverage of the Middle East and North Africa, saw the number of channels increase by 45. The 7° West neighbourhood now carries 394 television channels, comprising a mix of Arab language content and international channels;
  • 36° East covering Russia and Sub-Saharan Africa, saw an increase in the number of TV channels (up 117) and now broadcasts a total of 686 channels. These markets benefitted in 2010 from the arrival of the W7 satellite, which more than doubled capacity.  

Future growth of video applications will be accelerated by the entry into service of two satellites, ATLANTIC BIRD™ 7 at 7° West and W3C at 16° East.

DATA AND VALUE ADDED SERVICES (20.3% of revenues)

Data Services revenues grew by 2.5% to €48.3 million, following recent years of double-digit growth, fuelled by the entry into service of the W2A satellite in May 2009, and the W7 satellite, in January 2010. Carrying Ku-band and C-band capacity to serve Africa, the Middle East and Central Asia, these satellites enjoyed record ramp-up reflecting the dynamism of these markets.

With two wide beams covering Europe, the Middle East, Africa and Central Asia facilitating GSM backhaul,  enterprise networks, and Internet backbone connectivity, the W3C satellite is scheduled to enter into service on 9 November, and will provide additional resources to meet the demand of data customers.  

Value Added Services revenues were €11.3 million, down 3.9%.  This reflected an unfavourable year-on-year comparison base for D-STAR revenues, as the first quarter last year was boosted by the sale of terminals to support the rollout of the French railway (SNCF) in-train Internet access service to part of its network. The maritime business using D-STAR terminals to connect ships at sea to high-speed internet saw growth driven by the demand on cruise ships in the Mediterranean.

Revenues from the Tooway™ consumer broadband are ramping at a pace in-line with the Company's expectations. Business development continued across the entire KA-SAT footprint, which covers Europe, the Middle East, parts of Central Asia and the Mediterranean Basin. Contracts had been signed with 20 distributors in 13 countries as at September 30.  

MULTIUSAGE (12.3 % of revenues)

Revenues from Multiusage services stood at €36.2 million, up 25.9%.  Demand for government services remained strong, driven by the renewal of capacity from existing contracts as well as new contracts signed during the quarter on satellites covering North Africa and the Middle East.  

OTHER REVENUES

Other revenue, which comprises mainly contributions from some service contracts with partners and the Group's foreign exchange hedging programme, contributed €1.3 million compared to €2.4 million the previous year.  

OBJECTIVES FOR FISCAL YEAR 2011-12 AND NEXT THREE YEARS CONFIRMED

Short and medium-term outlook confirmed:

Revenues: in excess of €1,235 million for fiscal year 2011-2012 and a 3-year CAGR above 7% over the next three fiscal years to June 2014.

EBITDA margin: above 77% for each fiscal year until June 2014 - with EBITDA above €955 million for fiscal year 2011-2012.

Average capital expenditure:  €550 million per annum over the three year period ending June 30, 2014

Distribution:  50% to 75% of Group share on net income

Net debt/EBITDA: Below 3.5x (Investment grade rating objective)

RECENT EVENTS AND FLEET DEPLOYMENT

New in-orbit resources poised to accelerate top-line growth in the second half:

ATLANTIC BIRD™ 7:  

Launched on 24 September 2011, the ATLANTIC BIRD™ 7 satellite entered into service on 23 October at the 7° West orbital position, the leading video neighbourhood in North Africa and the Middle East. Eutelsat operates at this position in close coordination with the Egyptian satellite operator, Nilesat, and currently broadcasts 394 Arab and international channels to an audience of nearly 30 million satellite homes.

With up to 50 transponders, 11 more than ATLANTIC BIRD™ 4A, the satellite it replaced, ATLANTIC BIRD™ 7 has significantly increased resources in this key video neighbourhood, offering superior coverage across the Gulf states, up to the Atlantic coast of Northwest Africa.

Having completed its mission at 7° West, the ATLANTIC BIRD™ 4A satellite is now released to continue full commercial service at another Eutelsat location. The satellite is being redeployed to 3° East to address data and telecom markets in Europe and South-West Asia. It will be called EUTELSAT 3C and will be co-located at 3° East with EUTELSAT 3A.

W3C:  

Launched on 7 October 2011, the W3C satellite is scheduled to enter into service on 9 November at the orbital position 16° East. It replaces the EUROBIRD™ 16, W2M and SESAT 1 satellites. Through its configuration of 56 transponders, (53 Ku and 3 Ka), it will address markets for broadcasting and telecom/data services via four footprints:

  • A high-power footprint optimised for Direct-to-Home broadcasting in Central Europe will anchor the 16° East neighbourhood as a point of reference for satellite TV in the region, currently broadcasting 481 TV channels and serving over 11 million households;
  • A second beam, centered over the Indian Ocean islands, will allow broadcasters serving this geography to ensure the extension of their subscription television offers and accelerate the transition to "all-digital" free-to-air channels to the French departments of Mayotte and the Reunion Islands;
  • A wide footprint serving Europe, North Africa and the Middle East will expand capacity to serve markets for data networks and newsgathering;
  • A new footprint for 16° East, with Ku-band coverage stretching from Senegal to Madagascar and enabling connectivity with Europe in Ka-band, will respond to high-growth applications that include GSM backhaul and Internet access for enterprises and public agencies.

Following WC3's entry into service, EUROBIRD™ 16 and SESAT 1 will go into inclined orbit at 16° East and W2M will be redeployed to an alternative location.

Newly commissioned satellite:

EUTELSAT 9B:  Covering Western Europe

Eutelsat Communications announced it is initiating a new satellite programme that will significantly expand and diversify resources at its 9° East location which addresses high-growth video markets across Europe. A high-capacity Ku-band satellite called EUTELSAT 9B, ordered from Astrium, will be launched to 9° East at the end of 2014. Open for business since 2007, Eutelsat's 9° East position is currently occupied by the 38-transponder EUROBIRD™ 9A satellite. Broadcasting more than 330 channels, of which over 10% already in HD, it is one of the Group's fastest-growing neighbourhoods. Its close proximity to Eutelsat's flagship HOT BIRD™ satellites at 13° East also gives satellite viewers the opportunity to increase viewing choice through a dual-feed antenna.

Moody's Upgrade:

On October 20, Moody's Investors Service issued a note upgrading the senior unsecured issuer rating of Eutelsat S.A. to Baa2 from Baa3 and bank loan rating at Eutelsat Communications S.A. to Baa3 from Ba1. These new credit ratings both have a stable outlook.

*    *    *

Financial calendar

The financial calendar below is provided for information purposes only. It is subject to change and will be regularly updated, please consult the investors section of the corporate website http://www.eutelsat.com for the latest information:

  • November 8, 2011: Annual Shareholders Meeting.
  • February 16, 2012: earnings for the first half ended December 31, 2011.
  • May 10, 2012: revenues for third quarter ended March 31, 2012.
  • July 30, 2012: earnings for the full year ended June 30, 2012

About Eutelsat Communications

Eutelsat Communications (Euronext Paris: ETL, ISIN code: FR0010221234) is the holding company of Eutelsat S.A.. With capacity commercialised on 29 satellites that provide coverage over the entire European continent, as well as the Middle East, Africa, India and significant parts of Asia and the Americas, Eutelsat is one of the world's three leading satellite operators in terms of revenues. At 30 September 2010, Eutelsat's satellites were broadcasting more than 3,950 television channels. Nearly 1,100 channels broadcast via its HOT BIRD™ video neighbourhood at 13 degrees East which serves over 120 million cable and satellite homes in Europe, the Middle East and North Africa. The Group's satellites also serve a wide range of fixed and mobile telecommunications services, TV contribution markets, corporate networks, and broadband markets for Internet Service Providers and for transport, maritime and in-flight markets. Eutelsat's broadband subsidiary, Skylogic, markets and operates access to high speed internet services through teleports in France and Italy that serve enterprises, local communities, government agencies and aid organisations in Europe, Africa, Asia and the Americas. Headquartered in Paris, Eutelsat and its subsidiaries employ nearly 700 commercial, technical and operational employees from 30 countries.

http://www.eutelsat.com


Appendix

Revenue breakdown by application (in percentage of revenues)*

    3 months ended 30 September               2010           2011
    Video Applications                        69.1           67.4
    Data & Value-Added Services               20.8           20.3
    ........of which Data Services            16.7           16.4
    .......of which Value-Added Services       4.1            3.8
    Multi-usage                               10.2           12.3
    Total                                      100%           100%


*excluding other revenues and one-off revenues (€2.4 million in Q1 2010-2011 and 1.3 million in Q1 2011-2012)

Quarterly revenues by business application

                                       3 months ended
    In millions of
    euros          09/30/2010 31/12/2010 31/03/2011 30/06/2011 30/09/2011
    Video
    Applications     195.5      196.5      198.5      195.9      198.2
    Data &
    Value-Added
    Services          58.9       58.0       58.9       58.3       59.6
    ............of
        which Data
          Services    47.2       45.9       47.3       47.6       48.3
    ......of which
       Value-Added
          Services    11.7       12.1       11.5       10.7       11.3
    Multi-usage       28.8       28.6       32.6       35.6       36.2
    Other              2.4        4.5        3.2        7.3        1.3
    Sub-total        285.6      287.5      293.2      297.1      295.4
    Non-recurring
    revenues[1]         --        2.7        2.0         --         --
    Total            285.6      290.2      295.2      297.1      295.4


Estimated satellite launch schedule

                         Estimated launch*
 
    Satellite             (Calendar year)      Transponders
    W6A                       Q4 2012               40 Ku
    W5A                       Q4 2012               48 Ku
    W3D                       Q1 2013          53 Ku/3 Ka
    EUROBIRD(TM) 2A**         H1 2013          16 Ku/7 Ka
    EUTELSAT 3B               H1 2014       51 (Ku, Ka, C)
    EUTELSAT 9B               H2 2014         Up to 60 Ku


* Satellites generally enter into service one to two months after launch.

** Partnership satellite with ictQATAR, transponders indicated for Eutelsat portion only

1. Non-recurring revenues comprise late delivery penalties and outage penalties.


SOURCE Eutelsat Communications