SES scraps plans to split
November 5, 2020
By Chris Forrester
SES has unveiled its Q3 and nine-month numbers, and also announced that it has cancelled plans to divide the company into two: a Video-based business (responsible for 59 per cent of group revenue) and a Networks company.
Group revenues for the nine months were €1.41 billion and down 2.9 per cent on 2019’s €1.45 billion.
CEO Steve Collar said that it was the company’s Networks revenues that were the star performer with revenues up 7.5 per cent y-o-y and the third year of strong growth. The Video division’s revenue was “stable q-o-q” according to a company statement at €832 million (down 8.1 per cent).
Also showing excellent growth was SES ‘Mobility’ with 17.9 per cent growth y-o-y.
Collar said that the company was “on track” to clear US C-band frequencies and to realise the full $4 billion of accelerated relocation payments from the FCC.
At September 30th 2020, SES carried a total of 8,157 TV channels to viewers around the world including 2,964 channels in High Definition and Ultra HD (up 1 per cent year-on-year). 69 per cent of total TV channels are now broadcast in MPEG-4 with an additional 4 per cent in HEVC.
“Our solid performance continued into the third quarter, despite ongoing Covid-19 headwinds, with sustained growth across Networks and stable revenue quarter-on-quarter in our Video business. We were delighted to announce a substantial extension of our relationship with Canal+ across three orbital locations and valued at over €230 million, as well as a meaningful extension of our strategic partnership with Microsoft as an Azure Orbital connectivity partner and satellite partner for Azure Modular Data Centres. We took measures early in the development of the Covid-19 pandemic to protect the bottom line and the benefits of these cost-saving measures are reflected in our resilient Adjusted EBITDA performance.”
“In Europe, modest volume reductions on some long-term renewals secured in late 2019 led to lower year-on-year revenue, albeit utilisation rates across SES’ industry-leading European Video neighbourhoods remained strong. North American development was impacted by ongoing ‘right-sizing’ of volume across US cable neighbourhoods and the reduction in the wholesale business, resulting in lower overall year-on-year revenue. In the International markets, the contribution of new revenue secured is yet to fully offset the impact of challenging trading environments, leading to a modest revenue reduction (year-on-year),” said the company.
The numbers received praise from Giles Thorne from investment bank Jefferies, who said SES had delivered a “good set of results. There is plenty here to support the recent break-out in the equity [share price rise], albeit from depressed levels”.