SES: “Breakout year for Networks division”

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SES has unveiledits 2018 results, and after three years of top line declines in some of its key divisions, CEO Steve Collar reported a return to group organic revenue growth of 1.9 percent. Importantly, SES said that it believed it is making “considerable progress” with its C-band initiative for the realignment of some 200 MHz of satellite spectrum over the US.

Revenues were 1 per cent ahead of expectations (at €2.010 billion) with its all-important Video division turning in revenues of €1.306 billion while the growing Networks division was a very useful 4 per cent ahead (at €696 million).

SES says it has been a “breakout year” for SES Networks which delivered double-digit underlying growth and growth in all three market segments. Collar said “2018 was a good year for SES. We have delivered top-line growth, exceeding the top end of our revenue outlook on the back of an exceptionally strong year for SES Networks. We are transforming our business internally and externally, retooling the organisation in response to the strong demand for end-to-end services, managing operational costs while expanding competencies and capabilities to drive growth. The strong focus on cash flow and cost control that started in 2018 will continue and accelerate in 2019.”

“SES Video, representing two-thirds of our group revenue, also delivered on its 2018 revenue outlook and scored important wins despite challenging market conditions,” added Collar. “We signed new customers and platforms while securing important renewals in our core neighbourhoods, including with Viacom, M7, QVC and Channel 4 in Europe as well as Comcast in North America. Given our 30+ year experience as one of the first providers of DTH services, I am delighted that we signed multi-year agreements to launch and expand new DTH platforms in the Caribbean with Kiwisat and in Eastern Europe with Telekom Srbija. In MX1, our video services business, new deals were secured with Agence France-Press, Discovery and Cell-C, while our HD+ service in Germany expanded with the addition of an Ultra High Definition channel from RTL. We continue to carry more HD and UHD channels across our network than any other satellite service provider.”

According to analysts from Exane/BNPP the 2019 outlook is 3 per cent below consensus in terms of midpoint revenues. Management has trimmed its Video outlook but reaffirmed its double digit guidance for Networks. “We note that Management is guiding for broadly flat topline growth for 2019 and a return to growth 2020.”


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