SES: YTD and Q3 2024 Results
LUXEMBOURG--(BUSINESS WIRE)--November 07, 2024--
SES S.A. announces financial results for the nine months and three months ended 30 September 2024 with solid operational and financial performance driving the Full Year 2024 revenue and Adjusted EBITDA outturn which is now expected to close at the top end of SES's financial outlook range.
-- Revenue of EUR1,475 million (-1.1% YOY(1)) and Adjusted EBITDA(2) of
EUR775 million (-2.0% YOY(1))
-- Networks up +2.9% YOY(1) with high single digit growth in Government,
Aviation, and Cruise
-- Media performance (-5.5% YOY(1) YTD) in line with expectations and
improving trend in Q3 2024 of -3.1% YOY(1)
-- EUR900 million renewals & new business. Signed $200 million NATO
government contract for O3b mPOWER; Thai Airways and Turkish Airlines for
SES Open Orbits(3); multi-year media renewals with Sky, Warner Brothers
Discovery, Telekom Srbija, RTL, and ORF/ORS
-- Adjusted Free Cash Flow of EUR262 million up 5% YOY with Net Leverage at
1.1x(4). Cash & cash equivalents at EUR3.2 billion including EUR1 billion
of proceeds from the successful Hybrid bonds issuance
-- 2024 Revenue outlook(5) and Adjusted EBITDA outlook(4) are now both
tracking to the top end of the expected range
-- Intelsat acquisition on track to complete during H2 2025 with progress
towards regulatory clearances and integration planning
-- IRIS2 concession award enables MEO network expansion to keep pace with
growing customer demand in line with financial policy
Adel Al-Saleh, CEO of SES, commented: "2024 financial performance continues to track in line with our expectations, reflecting solid execution and the strength of SES's differentiated customer solutions across our target segments. We expect to deliver Full Year 2024 revenue and Adjusted EBITDA at the top end of our outlook, as we work towards improving the business' growth trajectory.
Our Networks business continues to grow led by high single digit growth in Government, Aviation, and Cruise. The launch of mPOWER satellites 7 and 8 is on track for December 2024 which, along with the launch of satellites 9, 10, and 11 during 2025 and satellites 12 and 13 at the end of 2026, will add much needed capacity to the constellation to support the rapidly expanding demand for our MEO-based vertical solutions. In Media, we expect our solid Q3 2024 performance to continue for Q4, underscoring the underlying value of our core TV neighbourhoods and customer offerings, as reflected by the important multi-year deals signed this year.
The regulatory process for the Intelsat acquisition is beginning to gather pace with a number of clearances already granted, while the integration planning has further advanced to ensure execution from Day 1 of closing which remains on course for H2 next year.
Lastly, the award to SES and our consortium partners to design, deliver, and operate Europe's sovereign multi-orbit IRIS(2) government communications network creates value for the European Union and enables the expansion of our differentiated MEO infrastructure, where customer demand continues to grow, while remaining committed to all our financial policy objectives."
_____________________________________ 1) At constant FX (comparative figures restated to neutralise currency variations) 2) Excluding operating expenses/income recognised in relation to U.S. C-band repurposing and other significant special items (disclosed separately). 3) SES Open OrbitsTM is a partnership between SES, Neo Space Group, AeroSat Link, and Hughes Communications India. These new IFC services are delivered by SES along with one of its key SES Open Orbits$(TM)$ connectivity service partners, Neo Space Group 4) Adjusted Net Debt to Adjusted EBITDA (treats hybrid bonds as 50% debt and 50% equity) 5) Financial outlook assumes a EUR/$ FX rate of EUR1 = $1.09, nominal satellite health, and nominal launch schedule
Key business and financial highlights (at constant FX unless explained otherwise)
SES regularly uses Alternative Performance Measures $(APM.AU)$ to present the performance of the group and believes that these APMs are relevant to enhance understanding of the financial performance and financial position.
EUR million YTD 2024 YTD 2023 as reported at constant FX -------------------------- --------- --------- ------------ -------------- Average EUR/$ FX rate 1.09 1.08 -------------------------- --------- --------- ------------ -------------- Revenue 1,475 1,494 -1.3% -1.1% -------------------------- --------- --------- ------------ -------------- Adjusted EBITDA 775 792 -2.1% -2.0% -------------------------- --------- --------- ------------ -------------- Adjusted Net Profit 116 180 -35.1% n/m -------------------------- --------- --------- ------------ -------------- Adjusted Net Debt / 1.1 times 3.5 times n/m n/m Adjusted EBITDA ========================== ========= ========= ============ ============== "At constant FX" refers to comparative figures restated at the current period FX, to neutralise currency variations.
Networks (53% of total) revenue of EUR787 million increased +2.9% year on year driven by growth in Government (+7.2%) and Mobility (+5.0% including periodic revenue in Q1 2024 and high single digit growth in Aviation). In Fixed Data (-7.4%), the comparison with YTD 2023 is impacted by periodic revenue recognised in the prior period, although revenue in Q3 2024 was 16.0% higher than Q2 2024 mainly reflecting the benefit of new Cloud business. YTD the Networks business secured EUR545 million of renewals and new business.
Media (47% of total) revenue of EUR686 million represented a reduction of -5.5% compared with YTD 2023, mainly driven by lower revenue in mature markets which were partially offset by double digit growth in Sports & Events revenue. So far in 2024, the Media business secured EUR355 million of renewals and new business.
SES's fully protected contract backlog on 30 September 2024 was EUR3.7 billion (EUR4.6 billion gross backlog including backlog with contractual break clauses), of which Media was EUR1.9 billion (EUR2.0 billion gross backlog) and Networks was EUR1.8 billion (EUR2.6 billion gross backlog).
Adjusted EBITDA of EUR775 million represented an Adjusted EBITDA margin of 53% (YTD 2023: 53%). Adjusted EBITDA excludes significant special items of EUR41 million (YTD 2023: EUR2,678 million), comprising net U.S. C-band income of EUR2 million (YTD 2023: net income of EUR2,701 million) and expenses related to other significant special items of EUR43 million (YTD 2023: EUR23 million).
Adjusted Net Profit of EUR116 million mainly reflected the lower year on year Adjusted EBITDA and higher depreciation & amortisation. This was offset by lower net financing costs of EUR6 million (YTD 2023: EUR49 million) which included the benefit of earning interest income on the group's cash & cash equivalents of EUR92 million (YTD 2023: EUR13 million). It also included a net foreign exchange (FX) loss of EUR8 million (YTD 2023: FX gain of EUR17 million) and lower capitalised interest of EUR11 million (YTD 2023: EUR24 million).
Adjusted Free Cash Flow (excluding significant special items) of EUR262 million was EUR12 million, or 4.8%, higher year on year including the benefit of lower year on year investing activities of EUR264 million (YTD 2023: EUR303 million) and higher cash interest received of EUR90 million (YTD 2023: EUR13 million). These items were partly offset by higher year on year cash tax payments and changes in working capital.
Adjusted Net Debt to Adjusted EBITDA ratio (treating 50% of EUR1.625 billion of hybrid bonds as debt and 50% as equity) on 30 September 2024 was 1.1 times (30 September 2023: 3.5 times, 31 December 2023: 1.5 times). Cash & cash equivalents of EUR3.2 billion included the proceeds from the hybrid dual-tranche bond offering totalling EUR1 billion completed at the end of September 2024.
The total amount of remaining U.S. C-band clearing cost reimbursements expected to be received in future is now approximately $150 million and SES is continuing to engage with insurers regarding the claim of $472 million relating to O3b mPOWER satellites 1-4.
The Full Year 2024 interim dividend of EUR0.25 per A-share and EUR0.10 per B-share was paid to shareholders on 18 October 2024.
The share buyback programme of EUR150 million was started in November 2023 and has been completed in respect of the A-shares in October 2024 with 24 million A-shares purchased at an average price of EUR5.22 per A-share. In addition, 6 million B-shares were purchased and a further 6 million B-shares will be purchased to maintain the ratio of two A-shares to one B-share, as required by the Articles of Association, at a combined average price of EUR2.09 per B-share. The shares acquired will be cancelled after the expiry of one year, which will reduce the total number of voting and economic shares in issue.
For Full Year 2024, group revenue and Adjusted EBITDA (assuming an FX rate of EUR1=$1.09, nominal satellite health, and nominal launch schedule) are expected to be at the top end of the range of EUR1,940-2,000 million and EUR950-1,000 million respectively, with growth in Networks revenue expected to mostly offset lower year on year Media revenue. Capital expenditure (net cash absorbed by investing activities excluding acquisitions, financial investments, U.S. C-band repurposing, and assuming an FX rate of EUR1=$1.09) is expected to be in the range of EUR500-550 million in 2024 with an average annual capital expenditure of approximately EUR350 million for 2025-2028. This excludes any potential change relating to IRIS(2) where the cash flows and investment levels have not yet been finalised as part of final contract negotiations.
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