The Board of Directors of Eutelsat Communications, chaired by Michel de Rosen, reviewed the financial results for the half-year ended 31 December 2016.
Commenting on the First Half, Rodolphe Belmer Chief Executive Officer of Eutelsat Communications, said: “First Half revenues were in line with expectations, and we are on track to reach our current and three year objectives thanks to a solid commercial performance. We are also on target to deliver on our commitment to reduce capital expenditure, notably thanks to the highly effective application of ‘design-to-cost’ for satellite procurement. This semester we have also launched the ‘LEAP’ cost-savings plan, aimed at generating €30 million in annualised savings by fiscal year 2018-19, contributing to the robustness of our Free Cash Flow generation targets and enabling us to raise our EBITDA margin outlook. We are making strong progress in our newly defined ‘Connectivity’ business line, with the lease of the HTS payload on EUTELSAT 3B for in-flight connectivity on Saudi Arabian Airlines, and contracts on KA-SAT for in-flight connectivity for SAS and Finnair. By securing Ka-band capacity from Yahsat we will also launch our African broadband initiative with only a slight delay relative to the original plan. Finally, we are about to close a joint-venture with ViaSat which paves the way for a step-up in broadband and mobile connectivity from the early 2020s, with no change to our Capex framework.”
Solid commercial performance supporting revenues:
Fall campaign renewal rate with the US Department of Defense above expectations;
Progress on HD and Ultra HD channel take-up on HOTBIRD;
Contracts signed for in-flight Connectivity for SAS and Finnair on KA-SAT and for Saudi Arabian Airlines on the HTS payload of EUTELSAT 3B, which is now fully leased.
Delivering on Capex reduction and Discretionary Free Cash Flow generation:
- EUTELSAT 5 West B satellite procurement with ‘design-to-cost’ policy enabling Capex savings of more than 30%;
- Strong growth in Discretionary Free Cash Flow in the first half.
- Launch of ‘LEAP’ cost-savings plan aimed at generating €30 million in annualised savings by 2018-19;
- EBITDA margin outlook raised.
Preparing the ground for future growth in Connectivity:
- Securing of Ka-band capacity from Yahsat enabling the launch of the African broadband initiative (Konnect Africa) in H2 2016-17;
- Upcoming joint-venture with ViaSat paving the way for a step-up in Connectivity from the early 2020s, with no change to Capex outlook.