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Eutelsat earnings preview “in line”

July 29, 2020

Eutelsat will unveil its full year numbers (for the year to June 30th) on July 31st.

The market, notwithstanding some interesting recent news releases concerning Canal Plus (for an Ethiopian DTH bundle) and Orange France and its plan to secure capacity on Eutelsat’s Konnect craft for a ‘broadband by satellite’ service over France, believes revenues will be mostly in line with consensus expectations.

“At €1.267 billion and €971 million, our FY20 revenues and EBITDA forecasts are broadly in line with consensus expectations,” says Sami Kassab of investment bank Exane/BNPP.

“We are slightly more cautious on Free Cash Flow generation as we expect Covid-19 to have weighed on cash collection in Q4 and Working Capital requirements (WCR) to drag on cash generation. We expect WCR to bounce back in FY21,” adds Kassab.

The bank says: “We believe the focus of the [results] publication is likely to be on the FY21 and medium-term outlook that management may provide. While we stand in line with consensus on FY21 revenues of €1.227 billion (4 per cent organic revenue decline) we are 90 bps below consensus EBITDA21 margins (Exane BNPP at 75.7 per cent) as we believe Eutelsat may announce a step-up in its Fixed Broadband investment strategy, driven in particular by higher Subscriber Acquisition Costs.”

“We expect Eutelsat management to guide for Free Cash Flow growth over the coming three years,” concludes Exane/BNPP.

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