SES Posts Slight Increase in 2018 YTD Revenues to EUR 1.469 Billion

Luxembourg, Oct. 26, 2018 — SES S.A. announced solid financial results for the nine and three months ended September 30,  2018 with group revenue growing, fuelled by strengthening double-digit growth at SES Networks.

Steve Collar, president and CEO, said the company’s focus on execution continues to generate strong financial performance, delivering growth in absolute and underlying revenue, “and we remain on track to deliver on our year-end financial outlook.”

SES said its group revenue was EUR 1,469.4 million for YTD 2018 (+0.4% at constant FX compared with the prior period). Underlying revenue (excluding periodic and other) grew by 2.1% (year-on-year) at constant FX to EUR 1,445.6 million, including growth of 3.2% (year-on-year) in Q3 2018. Periodic and other revenue for YTD 2018 was EUR 23.8 million, including EUR 3.7 million in Q3 2018.

SES Video YTD 2018 revenue of EUR 967.5 million was 2.8% lower (year-on-year) at constant FX, as growth in video services partly offset lower video distribution revenue. Q3 2018 revenue of EUR 317.5 million was 3.8% lower (year-on-year) at constant FX.

In Q3 2018, SES Video continued to secure important renewals across core neighbourhoods (including Channel 4 and QVC), while also securing agreements with customers to expand TV channel offerings in Latin America (Kiwisat) and Nigeria (Africa.XP). MX1 is now partnering with Smart Mobile Labs to enhance the experience for spectators of live events, while also continuing to build market traction for the MX1 360 solution.

SES Networks YTD 2018 underlying revenue grew by 13.6% (year-on-year) at constant FX to EUR 478.1 million. Mobility (+32.6%) and Government (+21.0%) continued to deliver strong growth, while Fixed Data (-3.3%) lower (year-on-year) was positive in Q3 (+1.7%). Q3 2018 underlying revenue grew by 19.5% (year-on-year) at constant FX to EUR 166.7 million with Government, Fixed Data and Mobility all contributing positively.

SES Networks gained further commercial momentum in Q3 2018 with new agreements signed across all verticals including new fixed data business in Latin America (TV Isla), the Pacific (DataCo) and global cloud (IBM); new U.S. Government business supporting Air Combat Command; and incremental maritime services signed with Navarino and Marlink. This was complemented by expanded commitments in aeronautical, and the addition of new cruise clients.

YTD 2018 EBITDA of 927.7 million represented an EBITDA margin of 63.1%, or 63.8% excluding a restructuring charge of EUR 9.7 million associated with the group’s on-going optimisation programme.

Net profit attributable to SES shareholders was EUR 303.7 million for YTD 2018, including the positive tax contribution relating to GovSat-1 and the O3b business that was recognised in the H1 2018 results.

Net debt to EBITDA ratio (as per the rating agency methodology) was 3.43 times, compared with 3.53 times at Q2 2018 and 3.27 times at Q4 2017. The net debt to EBITDA ratio is expected to be below 3.30 times by the end of 2018.

SES’s fully protected contract backlog as at Q3 2018 was EUR 7.0 billion (at Q3 2017: EUR 7.6 billion at constant FX).

97% of 2018 expected group revenue is now contractually committed and the business remains on track to deliver 2018 group revenue within the top half of the outlook range (between EUR 1,990 million and EUR 2,035 million1, with SES Video at the lower end and SES Networks at the higher end of the range) and EBITDA of over EUR 1,270 million1 and grow group revenue and EBITDA by 2020 at constant FX.

2018 expected Capital Expenditure (CapEx) is reduced by EUR 80 million to EUR 380 million1, of which EUR 10 million has been moved to 2019 and EUR 70 million to 2020, with no change in the overall CapEx profile between 2018 and 2022.

Collar said SES Networks again demonstrated that it is the growth engine for the business with underlying growth of 14% year-to-date and almost 20% in Q3 2018. “For the first time in a number of years, all three of the SES Networks’ business verticals delivered growth this quarter, including a positive contribution from Fixed Data.”

To reinforce the positive contribution from Fixed Data, the company delivered a major turn-key project in Papau New Guinea in record time in the quarter, underscoring SES’s capabilities as an end-to-end managed service provider, while also concluding an important partnership agreement with IBM, strengthening the belief that Global Cloud Connectivity, and integration with Cloud Service Providers, will be an important driver of revenue and growth for SES in the future.

SES Video has signed important renewals and new business this quarter with now 96% of 2018’s expected total revenue secured, including an important renewal with Channel 4 in the U.K. Video Services contributed positively in Q3 with growing traction for our MX1 360 platform. International video distribution remains challenged with some platforms struggling to achieve market traction and strong competition for all new platforms. We remain focused on growth opportunities while reinforcing our core neighbourhoods that are among the best and most penetrated DTH neighborhoods in the world.