SES: Q1 2025 Results
Solid Start to the Year
LUXEMBOURG--(BUSINESS WIRE)--April 30, 2025--
SES S.A. announces financial results for the three months ended 31 March 2025.
-- Revenue of EUR509 million (-0.5% yoy(1)) and Adjusted EBITDA(2) of EUR280
million (-0.9% yoy(1)), both growing excl. periodic impact
-- Networks revenue up +8.4% yoy(1) including some periodic impact supported
by growth in Government (+13.1% yoy(1)) and Mobility (+8.5% yoy(1));
Media (-10.6% yoy(1)) in-line with expectations
-- EUR360 million of new business and contract renewals signed in Q1 2025
-- Net Leverage at 1.2x(3) (including cash & cash equivalents of EUR3.1
billion(4))
-- O3b mPOWER satellites 7&8 have reached final orbital position -- boosting
mPower network capacity and resilience from May
-- FY 2025 financial outlook(5) on track with yoy stable Revenue and broadly
stable Adjusted EBITDA re-affirmed
-- Fully funded Intelsat acquisition anticipated to complete in H2 2025 --
intention to optimise the combined debt structure
-- On 3 April 2025, AGM approved all company recommended resolutions
including prioritisation of shareholder returns
-- Final FY 2024 dividend of EUR110 million (EUR0.25 per A-share) paid to
shareholders on 17 April 2025
Adel Al-Saleh, CEO of SES, commented: "We delivered good Q1 performance which continues to underscore that our evolved strategy is yielding positive operational and financial results, leading to a solid start to the year. We continue to deliver commercial momentum across the business reaffirming our FY 2025 financial outlook.
On the back of a strong performance, the Networks business now accounts for approximately 60% of revenues and delivered year-on-year growth led by government and mobility. This highlights our robust position in target segments with a differentiated multi-orbit offering. We have secured EUR360 million in new business and contract renewals to support future growth including an enhanced pipeline of Government opportunities, significant wins by our Open Orbits$(TM)$ partners in aero, such as Uzbekistan Airways and extended cooperation with Thai Airways, and recent wins in Media with Mileto in Brazil and the Association of Tennis Professionals $(ATP.AU)$ globally. In Media we have delivered to expectations.
With a solid start to the year and mPOWER satellites 7&8 boosting mPower network capacity and resilience from May, we are on track to deliver strong operational performance with acceleration in Networks revenue to meet our FY 2025 financial outlook. The acquisition of Intelsat is progressing well and on track for completion in H2 2025."
____________________
1) At constant FX (comparative figures restated to
neutralise currency variations)
2) Excluding operating expenses/income recognised in
relation to U.S. C-band repurposing and other
significant special items (disclosed separately).
3) Adjusted Net Debt to Adjusted EBITDA (treats hybrid
bonds as 50% debt and 50% equity)
4) Excluding EUR295 million of restricted cash with
respect to the SES-led consortium's involvement in
IRIS(2)
5) Financial Outlook is stated at constant FX, assuming
nominal satellite health and launch schedule
Key business and financial highlights (at constant FX unless explained otherwise)
SES regularly uses Alternative Performance Measures $(APM.AU)$ to present the performance of the group and believes that these APMs are relevant to enhance understanding of the financial performance and financial position.
EUR million Q1 2025 Q1 2024 as reported at constant FX ---------------------- ---------- ---------- ------------- --------------- Average EUR/$ FX rate 1.04 1.09 - - ---------------------- ---------- ---------- ------------- --------------- Revenue 509 498 +2.1% -0.5% ---------------------- ---------- ---------- ------------- --------------- Adjusted EBITDA 280 275 +2.0% -0.9% ---------------------- ---------- ---------- ------------- --------------- Adjusted Net Profit 42 77 -45.7% n/m ---------------------- ---------- ---------- ------------- --------------- Adjusted Net Debt / 1.2 times 1.5 times n/m n/m Adjusted EBITDA ---------------------- ---------- ---------- ------------- --------------- "At constant FX" refers to comparative figures restated at the current period FX, to neutralise currency variations.
Networks revenue (60% of total revenue vs 54% in Q1 2024) of EUR302 million increased +8.4% year-on-year driven by growth in Government (+13.1% yoy) and Mobility (+8.5% yoy including periodic revenue of EUR19 million recognised in Q1 2025 vs EUR22 million in Q1 2024), offsetting lower Fixed Data (-2.0% yoy). Excluding periodic impact, Networks revenue grew +10.8% yoy and Mobility +18.0% yoy.
Media revenue (40% of total revenue vs 46% in Q1 2024) of EUR206 million reduced 10.6% year-on-year, on the back of lower revenue in mature markets due to capacity optimisation and the impact of SD channel switch offs as well as the Brazilian customer bankruptcy.
Adjusted EBITDA of EUR280 million represented an Adjusted EBITDA margin of 55% (Q1 2024: 55%) including flow through of the periodic revenue impact and some shifts in costs as well as lower margin equipment sales. Adjusted EBITDA excludes significant special items of EUR7 million (Q1 2024: EUR6 million).
Adjusted Net Profit of EUR42 million was lower than Q1 2024 (EUR77 million), mainly reflecting year-on-year increased depreciation & amortisation and higher net financing costs of EUR15 million (Q1 2024: net financing income of EUR5 million). This was partly offset by higher Adjusted EBITDA and lower net income tax expense. Net financing costs included the benefit of earned interest income on the group's cash & cash equivalents of EUR25 million (Q1 2024: EUR34 million), net interest expense on external borrowings of EUR21 million (2024: EUR22 million), loan fees and origination costs and other of EUR6 million (Q1 2024: EUR5 million) and the impact of net foreign exchange loss of EUR13 million (Q1 2024: loss of EUR1 million).
On 31 March 2025, Adjusted Net Debt to Adjusted EBITDA ratio (treating 50% of EUR1.524 billion of hybrid bonds as debt and 50% as equity) was 1.2 times (31 March 2024: 1.5 times). Cash & cash equivalents of EUR3.1 billion (excluding EUR295 million of restricted cash with respect to the SES-led consortium's involvement in IRIS(2) ) included the proceeds from the hybrid dual-tranche bond offering of EUR1 billion completed at the beginning of September 2024.
The total amount of remaining U.S. C-band clearing cost reimbursements expected to be received in future is now approximately $24 million. SES is continuing to engage with insurers regarding the insurance claim relating to O3b mPOWER satellites 1-4. In April, SES has closed some initial settlements with a small number of insurers, resulting in initial settlement payments of c.$58 million so far, with further settlements expected to follow.
On 3 April 2025, AGM approved all company recommended resolutions including prioritisation of shareholder returns. The final FY 2024 dividend of EUR110 million equal to EUR0.25 per A-share and EUR0.10 per B-share was paid to shareholders on 17 April 2025.
SES reaffirms its FY 2025 outlook (assuming nominal satellite health and launch schedule): FY 2025 Group Revenue is expected to be stable compared with 2024 (at constant FX) and Adjusted EBITDA is expected to be broadly stable year-on-year (at constant FX) on the better-than-expected 2024 outturn. Capital expenditure (net cash absorbed by investing activities excluding acquisitions and financial investments) is expected to be in the range of EUR425-475 million in 2025, followed by an average annual capital expenditure of approximately EUR325 million for 2026-2029.
In addition, SES's expected capital expenditure relating to IRIS(2) of up to EUR1.8 billion will start ramping mostly from 2027 and will translate into an average annual spend of around EUR400 million over 2027-2030 (subject to a rendezvous point at the end of 2025 to validate the project cost, technical requirements, and delivery timetable, whereby any party can exit in the event of excess expected cost, not meeting technical requirements, and/or delays to the in-service date).
The proposed acquisition of Intelsat is on track, and is anticipated to complete in H2 2025, subject to receiving the necessary regulatory clearances, with all previously communicated financial objectives for the combined company reaffirmed (pre-IRIS(2) ). As previously announced, SES expects the proposed acquisition to have a positive impact on free cash flow, increasing the Company's financial flexibility. In terms of capital allocation, SES remains committed to investment grade metrics, profitable investments, and a stable to progressive dividend. As SES meets its net leverage target (Adjusted Net Debt to Adjusted EBITDA) of below 3 times within 12-18 months after closing the Intelsat transaction, the company intends to increase the annual base dividend and at least a majority of future exceptional cashflows of the combined company will be prioritised for shareholder returns.
The financing of the Intelsat acquisition has also been fully secured. To optimise the debt structure of the combined entity, SES intends to redeem (in aggregate) approximately US$2bn of the 6.500% First Lien Senior Secured Notes due 2030 issued by Intelsat Jackson Holdings SA ("SSNs") on or before closing of the transaction, through (i) at closing, redemption of part of the SSNs in accordance with the terms thereof and ii) prior to closing, conducting open market purchases of the outstanding SSNs. After closing, SES may from time to time conduct further market purchases of the SSNs.
Operational performance
REVENUE BY BUSINESS UNIT
Revenue (EUR million) as Change (YOY) at constant
Q1 2025 reported FX
----------------------- ------------------------- --------------------------
Average EUR/$ FX rate 1.04
----------------------- ------------------------- --------------------------
Media 206 -10.6%
----------------------- ------------------------- --------------------------
Networks 302 +8.4%
----------------------- ------------------------- --------------------------
Government 148 +13.1%
----------------------- ------------------------- --------------------------
Fixed Data 59 -2.0%
----------------------- ------------------------- --------------------------
Mobility 95 +8.5%
----------------------- ------------------------- --------------------------
Other 0 n/m
----------------------- ------------------------- --------------------------
Group Total 509 -0.5%
----------------------- ------------------------- --------------------------
"At constant FX" refers to comparative figures restated at the current period
FX, to neutralise currency variations.
Future satellite launches
Satellite Region Application Launch Date
-------------------- -------------------- -------------------- ------------
O3b mPOWER Fixed Data,
(satellites 9,10 & Mobility,
11) Global Government 2025
-------------------- -------------------- -------------------- ------------
EAGLE-1 Europe Government 2026
-------------------- -------------------- -------------------- ------------
O3b mPOWER Fixed Data,
(satellites 12 & Mobility,
13) Global Government 2026
-------------------- -------------------- -------------------- ------------
Media, Fixed Data,
Mobility,
ASTRA 1Q Europe Government 2027
-------------------- -------------------- -------------------- ------------
Africa, Asia, Media, Fixed Data,
Europe, Middle Mobility,
SES-26 East Government 2027
-------------------- -------------------- -------------------- ------------
Final launch dates are subject to confirmation by launch providers.
CONSOLIDATED INCOME STATEMENT
EUR million Q1 2025 Q1 2024
------------------------------------------------------- ---------- ---------
Average EUR/$ FX rate 1.04 1.09
------------------------------------------------------- ---------- ---------
Revenue 509 498
------------------------------------------------------- ---------- ---------
U.S. C-band repurposing income 1 1
------------------------------------------------------- ---------- ---------
Other Income 1 -
------------------------------------------------------- ---------- ---------
Operating expenses (238) (230)
------------------------------------------------------- ---------- ---------
EBITDA 273 269
------------------------------------------------------- ---------- ---------
Depreciation expense (164) (139)
------------------------------------------------------- ---------- ---------
Amortisation expense (31) (19)
------------------------------------------------------- ---------- ---------
Non-cash impairment - -
------------------------------------------------------- ---------- ---------
Operating profit /(loss) 78 111
------------------------------------------------------- ---------- ---------
Net financing income/(costs) (26) 5
Profit/ (loss) before tax 52 116
------------------------------------------------------- ---------- ---------
Income tax expense (22) (43)
------------------------------------------------------- ---------- ---------
Non-controlling interest (1) -
------------------------------------------------------- ---------- ---------
Net Profit attributable to owners of the parent 29 73
------------------------------------------------------- ---------- ---------
Basic and diluted earnings per A-share (in EUR)(1) 0.06 0.16
------------------------------------------------------- ---------- ---------
Basic and diluted earnings per B-share (in EUR)(1) 0.03 0.06
------------------------------------------------------- ---------- ---------
1) Earnings per share is calculated as profit attributable to owners of the
parent divided by the weighted average number of shares outstanding during the
year, as adjusted to reflect the economic rights of each class of share. For
the purposes of the EPS calculation only, the net profit for the year
attributable to ordinary shareholders has been adjusted to include the assumed
coupon, net of tax, on the perpetual bonds.
EUR million Q1 2025 Q1 2024
------------------------------------------------- ------------- ------------
Adjusted EBITDA 280 275
------------------------------------------------- ------------- ------------
U.S. C-band income 1 1
------------------------------------------------- ------------- ------------
Other income 1 -
------------------------------------------------- ------------- ------------
U.S. C-band operating expenses (1) (2)
------------------------------------------------- ------------- ------------
Other significant special items(1) (8) (5)
------------------------------------------------- ------------- ------------
EBITDA 273 269
------------------------------------------------- ------------- ------------
1) Other significant special items include restructuring charges of EURnil
million (Q1 2024: EUR5 million) and costs associated with the development and
/ or implementation of merger and acquisition activities ("M&A") of EUR8
million (Q1 2024: EURnil million).
EUR million Q1 2025 Q1 2024
------------------------------------------------------ ---------- ----------
Adjusted Net Profit 42 77
------------------------------------------------------ ---------- ----------
U.S. C-band income 1 1
------------------------------------------------------ ---------- ----------
U.S. C-band operating expenses (1) (2)
------------------------------------------------------ ---------- ----------
Other income 1 -
------------------------------------------------------ ---------- ----------
Other significant special items (2) (19) (5)
------------------------------------------------------ ---------- ----------
Tax on significant special items 5 2
------------------------------------------------------ ---------- ----------
Net profit attributable to owners of the parent 29 73
------------------------------------------------------ ---------- ----------
2) Other significant special items comprise restructuring charges of EURnil
million (Q1 2024: EUR5 million) and M&A costs of EUR19 million (Q1 2024:
EURnil million). M&A costs include net financing charges of EUR11 million (Q1
2024: EURnil million) comprising an interest expense of EUR14 million (Q1
2024: nil million) and interest income of EUR6 million (Q1 2024: nil million)
associated with the EUR1 billion hybrid financing issued in September 2024 in
connection with the Intelsat transaction, and loan origination costs of EUR3
million (Q1 2024: nil million).
SUPPLEMENTARY INFORMATION
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