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Eutelsat expected financials outlined

October 3, 2019

Eutelsat will unveil its Q1 numbers on October 30th (Eutelsat’s financial year runs from July 1st to June 30th).

Analysts at investment bank Exane/BNPP previews the numbers saying that it expects Eutelsat to report a mixed bag of Q1 revenue growth trends. “While we expect the Video Broadcast division to post 1 per cent organic revenue growth (Eutelsat has changed its reporting and now includes the structurally challenged Professional Video in Fixed Data & Professional Video), we expect Mobility and Government to remain under pressure at respectively -1 per cent and -7 per cent.”

The bank is forecasting a return to positive organic revenue growth within Fixed Broadband (2 per cent) and further pressure in Fixed Data & Professional Video (-16 per cent). “We expect group organic revenue growth of -3.1 per cent in Q1/19 to lead to €324.6 million of revenues for the five operating verticals (and €325.8 million at the group level). Q4/19 top line declined by 3.5 per cent.”

“The return to top line growth in Video underpins our view that the attractive Equity Free cash flow yield of 12 per cent for [Eutelsat’s full year 2020] is sustainable in a context of falling video DTH replacement capex,” says the bank. “The return to growth in Fixed Broadband appears as another positive catalyst. Ongoing weakness in Mobility and Government however may raise concern on the strategic positioning of the group in these segments.”

The bank keeps its “Outperform” rating on Eutelsat, but says it still prefers SES. “SES is better exposed to the news-flow on C band and should be able to report a more significant improvement in group organic revenue growth (from -5 per cent in Q2/19 to -1 per cent expected in Q3/19).”

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