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Eutelsat’s new CEO: Good or bad for business?

Eutelsat celebrated the 10th Anniversary of its listing on the Paris bourse by holding an Investors Day in Paris on December 1st. The mood was decidedly upbeat , and presentation followed presentation in outlining the opportunities – and obvious challenges – ahead.

Outgoing CEO Michel de Rosen told analysts that the company had grown significantly in the past 10 years, from a €750 million revenue business to today’s €1.476 billion in the year to June 2015.  Ten years ago Eutelsat was carrying 1712 channels, and these had grown to 5,855.

The operator delivered a very strong overview of the state of the industry, and its own position in terms of growth, profitability, expansion possibilities and future innovation and technological developments.

During the day it emerged that Eutelsat is looking at acquiring new capacity for some of its emerging market ‘hot spots’ including 36 degrees East where it has recently pre-sold 11 transponders to Multichoice (which has also introduced a two-transponder ‘push’ broadband-by-satellite service to subs).

De Rosen, and deputy CEO Michel Azibert, reminded delegates that its all-important Backlog had also grown, almost doubling from €2.6 billion to €5.15 billion.  Today’s viewer reach is a massive 275 million homes, and represents a 30 per cent growth over the past 5 years. The Eutelsat fleet is now carrying about 40 TV platforms, up 17 per cent since 2010.  HD penetration stands at 17 per cent, and Azibert admitted that Eutelsat’s HD penetration, while good, was still lower than some of its competitors.

The Day prompted a slew of reports from equity analysts. For example, Exane/BNP-Paribas described the day as providing “positive feedback” and with Eutelsat staying as one of its “top picks” in Media. 

Investment bank Jefferies said it was a “solid” affair, and highlighted the arrival of Eutelsat’s new CEO Rodolphe Belmer, who was CEO at Canal Plus until July this year.  Jefferies welcomed Belmer, and his track record of dealing with change at C+ and how satellite will retain its place in TV’s eco-system.

However, the same day of presentations and the same exposure to Belmer left one analyst distinctly cold. “Appointing a new CEO called Rodolphe is auspicious at this time of year. But the decline of Groupe Canal over his tenure is a concern. Since he began as CEO, C+ has been losing subscribers in Mainland France, C+ has failed to adapt into a triple play operator, has lost key rights and has failed to build a TVOD or mobility platform like Sky or MTG,” said Laurie Davison at Deutsche Bank.

Davidson still favoured Eutelsat as an investment prospect over SES (indeed, his recommendation to investors is to “SELL” SES stock), and saying that UHD demand is “at best” five years away, adding “only a small minority will likely pay extra for UHD on top of HD, limiting new channel launches.”

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