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Eutelsat's first quarter 2019-2020 revenues

Satellite Evolution

Eutelsat Communications reports revenues for the First Quarter ended 30 September 2019.

Eutelsat's first quarter 2019-2020 revenues

Rodolphe Belmer, Chief Executive Officer, commented: “The first Quarter has seen a number of milestones in our Connectivity strategy, with the procurement of EUTELSAT 10B with significant pre-commitments in the mobility segment and the foundations laid for the IoT strategy, notably with the order of our first ELO constellation nanosatellites. Elsewhere, we have added a further lever to our cash flow strategy with the roll-out of the LEAP 2 cost-savings plan, aiming to generate opex economies of €20-25 million by FY 2021-22, which will be reinvested in our future growth verticals whilst preserving our EBITDA margin.

Despite our expectation that the revenues profile for the current year will be back-end loaded, the outturn of the First Quarter is slightly below our expectations, notably due to worsening trends in Data & Professional Video and the unplanned return of a couple of transponders in Russia. On the other hand, the coming quarters will benefit from easing comps in Government Services and Data & Professional Video, the contribution of new capacity and the ramp-up of African Broadband.

We therefore confirm our Full Year objective of revenues for the Operating Verticals of between €1,280 million and €1,320 million, albeit with an increased likelihood of a landing in the lower half of this range. All other elements of the financial outlook are also reiterated. These objectives are subject to a nominal deployment plan, and notably the outcome of tests on the condition of the EUTELSAT 5 West B satellite.”

Highlights

  • Procurement of EUTELSAT 10B with significant pre-commitments, notably from Gogo, highlighting robust demand in the mobility market;

  • Foundations laid for the development of our IoT strategy, with two complementary initiatives: -The order of first four ELO constellation nanosatellites, adding a future growth lever to Eutelsat’s Connectivity strategy -The launch of IoT FIRST, an end-to-end managed service operating in Ku-band on our existing geostationary fleet;

  • Launch of the LEAP 2 cost-savings program to generate opex savings of €20-25 million by FY 2021-22 to underpin Discretionary Free Cash Flow objective, and deploy resources in the growth verticals while preserving our EBITDA margin;

  • Positive outcome of Fall 2019 renewal campaign with USG with a 90% renewal rate;

  • All financial objectives based on nominal deployment plan confirmed, with FY 2019-20 revenues to benefit from and easing comparison basis in Government Services and Data & Professional Video, and in the Second Half, from the contribution of new capacity (EGNOS payload3 and EUTELSAT 7C) and the ramp-up of African Broadband.

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