Satellite operator SES reported an increase in recurring revenue and EBITDA increasing by 2.8% and 3.1%, respectively. Reported revenue remained essentially flat, with reported EBITDA decreasing slightly, due to the adverse evolution of the USD against the euro (average conversion rate in 2011 was 1.4035 compared to 1.3294 in 2010). Reported EBITDA also reflected the impact of the one-time reorganisation charge of EUR 14.8 million.
SES’ recurring revenue development in 2011 was in line with expectations, although impacted by the launch delays of QuetzSat-1 and SES-4, as well as by solar array anomalies on certain Lockheed Martin A2100 model satellites. Revenue and EBITDA growth would have been 3.3% and 3.8%, respectively, excluding these elements, according to a company statement.
“SES’ results for 2011 demonstrate the core resilience of our operating business. Revenue for the year was on target, despite the challenge of launch delays. Group profit grew by 26.8% year on year. In a busy second half, SES successfully launched four satellites. QuetzSat-1, a satellite wholly contracted by EchoStar, entered service in November, while the other new satellites carry mainly replacement capacity,” said Romain Bausch, SES CEO.
A continued focus on cost management contributed to the rise in recurring EBITDA delivering a recurring EBITDA margin of 74.6%. The reported EBITDA margin was 73.5%, incorporating the reorganisation costs as mentioned. Infrastructure activities continued to deliver a strong recurring EBITDA margin of 82.3%.
“SES’ organisational realignment was implemented during 2011. It is delivering real benefits, including enhanced focus on our key markets. Seven further satellites are being built and are due to be launched before the end of 2014. The majority of the new capacity will be serving customers in emerging markets. SES’ high quality orbital positions and footprints are laying down the foundation for future growth, Bausch added.
Reported operating profit was up 1.4% to EUR 808.2 million, while Profit of the group rose by 26.8% to EUR 617.7 million, the year-on-year increase being driven by a combination of higher operating earnings, reduced financing and tax charges, as well as by the adverse impact in 2010 of the discontinued operations charge of EUR 36.3 million taken in connection with ND SatCom.
Net operating cash flow remained strong in 2011 at EUR 1,079.9 million, representing an EBITDA conversion ratio of 84.7%. Outflows for investing activities, at EUR 850.3 million, reflect the intensive satellite procurement program.
The group’s contract backlog was substantially replenished, with about EUR 2 billion of renewals and new business being signed during the year, raising the total backlog by 6.1% from EUR 6.6 billion to EUR 7 billion.
Group indebtedness (Net Debt / EBITDA) stood at 3.12 times at the year end.
“SES’ organisational realignment was implemented during 2011. It is delivering real benefits, including enhanced focus on our key markets. Seven further satellites are being built and are due to be launched before the end of 2014. The majority of the new capacity will be serving customers in emerging markets. SES’ high quality orbital positions and footprints are laying down the foundation for future growth, Bausch added.
“2012 is an important year in the ongoing transformation of SES. We are developing our presence in emerging markets, while maintaining our strong position in the more mature European and North American markets. In 2012 we will experience the exceptional impact of the analogue TV switch-off in Germany. When eliminating the impact of this, we foresee an underlying three year revenue CAGR (2012-2014) of approximately 7.5%. On a recurring basis this is expected to be approximately 4.5%. This fully reflects the launch delays and satellite health issues. We look to the future with confidence,” said Bausch.
