SES Half Year 2019 Profit Dips Slightly, Maintains Financial Outlook

Luxembourg, July 30, 2019 — SES S.A. reported a slight decline in its first-half core profits for the six months ended 30 June 2019 but the company stuck with its guidance for 2019 and 2020  saying its performance is in line with SES’ expectations and continued growth in networks’ revenue.

SES reported revenues of US$1.07 billion (EUR 961.4 million), down 5.1%, while underlying revenue dropped to US$1.059 billion (EUR 950.6 million), a decline of 4.2%. But SES said it still expects its 2019 EBITDA to come to US$1.36 – US$1.42 billion (EUR 1.22-1.27 billion) and revenue to US$2.21 – US$2.27 billion (EUR 1.98-2.04 billion).

SES’s shares have recently seen a string of price target and estimate cuts on concern the company could reduce its full-year financial forecast.

Its earnings before interest, tax, depreciation and amortization (EBITDA) fell 8% to US$651.29 million (EUR 584.5 million) in the first six months of the year but were in line with consensus. Net profit attributable to SES shareholdings amounted to US$188.53 million (EUR 169.2 million).

SES’s chief executive Steve Collar made upbeat comments during a conference call saying he was “pretty confident” that the company would reach its guidance range. “We’ve had a solid first six months with financial results in line with our expectations, with continued revenue growth in Networks, strong control over cost and discretionary spending and important progress towards reshaping SES with the objective of delivering exceptional services and driving customer success.

Other key business highlights

  • Video underlying revenue of US$672.81 million (EUR 603.8 million) in H1 2019 was 8.8% lower (year-on-year) at constant FX due to lower video distribution revenue (-8.7%), including the North American wholesale business, and lower video services (-9.4%) revenue which was mainly due to the non-renewal of low-margin ‘legacy’ services in MX1.
  • Networks’ underlying revenue grew by 5.0% (year-on-year) at constant FX to US$386.42 million (EUR 346.8 million) in H1 2019. This expansion reflected the continued strong growth in the Government (+7.9%) and Mobility (+10.9%) businesses while Fixed Data was lower (-2.2%) than H1 2018.
  • EBITDA of US$651.30 million (EUR 584.5 million) (down 8.4% at constant FX) represented an EBITDA margin of 60.8%, or 62.0% excluding a restructuring charge of EUR 11.4 million associated with the group’s ongoing optimisation initiatives.
  • Free Cash Flow before financing was US$423.20 million (EUR 379.8 million), including a 30.3% (year-on-year) reduction in investing activities.
  • SES’s fully protected contract backlog at 30 June 2019 was US$7.13 billion (EUR 6.4 billion). 90% of the 2019 expected group revenue is now secured comprising over 90% of the Video and over 85% of the Networks expected revenue already contractually committed.

Board Update

Anne-Catherine Ries and Tsega Gebreyes have been appointed Vice-Chairpersons of the Board and Romain Bausch was re- elected as Chairman of the Board. In June 2019, Paul Konsbruck and Marc Serres joined the Board, while Jean-Paul Senninger, Jean-Paul Zens and Conny Kullman retired from the Board for personal reasons. The Board now has 13 members (compared with 15 as at the end of 2018), all of which are non-executive directors.