Eutelsat Reports Slight Decrease in Revenues in Fiscal Year 2020 But Affirms Company's Resilience in the Face of the COVID-19 Pandemic

Paris, France, July 31, 2020--The Board of Directors of Eutelsat Communications (ISIN: FR0010221234 - Euronext Paris: ETL), chaired by Dominique D’Hinnin, released the company's financial results for the fiscal year ended June 30, 2020. It reported total revenues of of €1,278 million--a 3.9 percent decrease from the previous fiscal year 2018-2019 on a reported basis and by -5.0% like-for-like. 

Fourth Quarter revenues stood at €320 million down 2.1% on a reported basis and by 4.4% like-forlike. Revenues of the five Operating Verticals stood at €317 million, down 4.3% year-on-year and 2.1% quarter-on-quarter on a like-for-like basis. 

Rodolphe Belmer, Chief Executive Officer of Eutelsat Communications, said: “Eutelsat has produced a robust set of results for Financial Year 2019-20 in the face of the Covid-19 headwinds, with a record level of Discretionary Free Cash Flow and an EBITDA margin that remains industry leading. Our core Broadcast business remains resilient, as demonstrated by the securing of a number of new contracts in Sub-Saharan Africa, notably with Canal+ Ethiopia." 

"We have also made significant headway in our Fixed Broadband strategy ahead of entry into service of EUTELSAT KONNECT. In Europe, a major wholesale agreement has been signed with Orange for the entire French capacity of EUTELSAT KONNECT and we are adding a retail pillar to our distribution strategy with the acquisition of the European satellite broadband activities of Bigblu Broadband, the leading distributor of satellite Broadband in Europe. In Africa the Schoolap project in DRC highlights the opportunities in the business-to-government vertical," Belmer added.

"As a result, the coming year is expected to mark a turning point for our Fixed Broadband vertical, with the ramp-up of EUTELSAT KONNECT, to be followed in subsequent years by further incremental Connectivity capacity, namely KONNECT VHTS and EUTELSAT 10B, adding traction to our return to growth strategy. We continue to experience the effects of the global health crisis most notably in the Mobile Connectivity vertical and to a lesser extent in Professional Video. Nevertheless our confidence in the resilience of core Broadcast and improving trends in the other verticals enable us to reinstate financial objectives. As a measure of financial prudence, and as previously announced, we are recommending a 30% reduction in dividend for FY 2019-20. We are committing to a return to our policy of a stable to progressive dividend in respect of FY 2020-21, based on the rebased dividend.” 

Broadcast (61% of revenues)

FY 2019-20 Broadcast revenues were down 1.2% like-for-like to €785 million. They reflected notably lower revenues at 36°East (return of a couple of transponders in Russia) and 7°East (termination of a contract in Sub-Saharan Africa).

Fourth Quarter revenues stood at €196 million, down by 1.5% year-on-year and by 1.4% quarter-onquarter with net one-off items representing most of the sequential decline. At 30 June 2020, the total number of channels broadcast by Eutelsat satellites stood at 6,788 down 4.3% year-on-year. HD penetration continued to increase, standing at 1,679 channels versus 1,551 a year earlier (+8.3%), implying a penetration rate of 24.7% compared to 21.9% a year earlier.

On the commercial front, the past year saw dynamic commercial activity in Sub-Saharan Africa with the addition of new platforms such as Ghana RCS, Africa XP and Strong Roots as well as the signature of an anchor deal with Canal+ in Ethiopia at 7°East, preparing the ground for future growth across this region. A contract with the Greek operator, Forthnet, has been renegotiated on lower terms in the context of the change of control of the company allowing securing business on the long term. 

Data & Professional Video (14% of revenues)

FY 2019-20 Data & Professional Video revenues stood at €175 million, down by 14.1% year-on-year. They continued to reflect the ongoing pricing pressure and highly competitive environment in this application, notably in Latin America, although volume trends improved throughout the year in Fixed Data notably with new business in MENA in the Second Half. In the last four months of the year, occasional use (part of Professional Video) was strongly affected by the suspension of live sports events resulting from the Covid-related lockdown. This was reflected in Fourth Quarter revenues which stood at €43 million, down 13.6% year-on-year and by 5.2% quarter-on-quarter.

Government Services (13% of revenues)

FY 2019-20 Government Services revenues stood at €161 million, down 3.3% on a like-for-like basis. They reflected on one hand the negative carry-forward effect of renewals with the US Government during the last 18 months, and on the other, the contribution of the EGNOS payload on EUTELSAT 5 WEST B since mid-February and incremental revenues generated by the relocated EUTELSAT 7A satellite.

Fourth Quarter revenues stood at €43 million, up 5.1% year-on-year and 6.1% quarter-on-quarter. The coming fiscal year stands to benefit from the entry into service of EUTELSAT QUANTUM in calendar 2021, bringing flexible and innovative capacity. In this context a multi-year agreement has been reached with Intelsat, securing its location at the 48°East orbital position thereby opening up extended access notably to the MENA region, and providing for joint-commercialization of the capacity.

Fixed Broadband (6% of revenues)

FY 2019-20 Fixed Broadband revenues stood at €77 million, down 5.6% like-for-like. The decline reflected yet again the scarcity of capacity and a lower contribution from traditional distributors in Europe which is yet not offset by the ramp-up of the Preferred Partnership Program although net additions returned to positive territory in the Fourth Quarter. In Africa, revenues remained modest pending the arrival of new capacity. Fourth Quarter revenues stood at €19 million, down 10.6% on a year-on-year basis, but stable quarter-on-quarter.

In the post-Covid context the demand for high quality, ubiquitous and reliable internet connectivity is higher than ever and FY 2020-21 should mark a turning point for Fixed Broadband with the entry into service of EUTELSAT KONNECT bringing long-awaited incremental capacity to Europe and a change in scale in Africa. Ahead of the availability of this satellite, we made significant headway in our European Broadband strategy with a major wholesale agreement with Orange for the entire capacity covering France on EUTELSAT KONNECT and the acquisition of the European satellite broadband activities of Bigblu Broadband, the leading distributor of satellite Broadband in Europe, adding a retail pillar. In Africa, revenues will benefit from the ramp-up of the Schoolap contract.

Mobile Connectivity (6% of revenues)

FY 2019-20 Mobile Connectivity revenues stood at €79 million, down 5.1% like-for-like. Revenues were stable over the first nine months, but affected by the Covid-19 crisis in the Fourth Quarter which led to an absence of airtime-related revenues on KA-SAT and lower revenues from certain service providers. On a positive note, the year saw the extension of our maritime mobility activity, including a new multi-year contract with Telenor Maritime.

Fourth quarter revenues stood at €17 million, down 20.7% on a year-on-year basis and 20.5% quarter-on-quarter. 5 Other Revenues Other Revenues amounted to €2 million versus €8 million a year earlier. They included a negative (€11) million impact from hedging operations compared to (€20) million last fiscal year.  

Read the full results, here: https://www.eutelsat.com/files/PDF/investors/2019-20/FY-2019-20-PR.pdf