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Eutelsat: OneWeb merger to generate €2bn by 2027

October 12, 2022

By Chris Forrester

Eutelsat has unveiled its Q1 results showing overall revenues have fallen by 4.5 per cent on a like-for-like basis to €287 million. But CEO Eva Berneke said that its merger with OneWeb, now progressing through the normal regulatory measures, would take the combined businesses to revenues of €2 billion by 2027.

Berneke said that the OneWeb-based sector is likely to see “double digit” and profitable revenue growth.

“The combined entity is expected to have revenues of circa c. €1.2 billion for FY 2023. From this base, revenues are expected to grow at a double-digit revenue CAGR over the medium to long-term, reaching €1.35-1.45 billion in FY 2024, €1.55-1.75 billion in FY 2025, and c. €2.0 billion in FY 2027. EBITDA for the combined entity is expected to grow at a double digit CAGR over the same period, outpacing revenues growth, rising from c. €700 million in FY 2023 to a range of €750-€850 million in FY 2024, €900 million to €1.1 billion in FY 2025, and about €1.4 billion in FY 2027,” she added.

As to Eutelsat’s quarterly numbers, she stressed that the overall fall in revenue was in line with expectations. However, the core numbers could be worrying. For example, its backbone ‘Broadcast’ sector fell back 7.4 per cent on a like-for-like basis. ‘Data/Professional’ fell back 2.4 percent (like for like) while ‘Government Services’ fell an alarming 17.7 per cent. The highlight growth segments were ‘Fixed Broadband’ jumped 21.1 per cent while ‘Mobile Connectivity’ rose 31.4 per cent (all like-for-like).

Berneke said: “Q1 Revenues are in line with our expectations, and we confirm our financial objectives for the current and subsequent years. Despite limited available capacity at this stage, we continue to record a strong double-digit growth in Fixed Broadband and Mobile Connectivity highlighting the massive long-term potential for both applications, while our mature broadcast activities declined in line with expectation.”

Its core ‘Broadcast’ division saw revenues of €170 million, down 7.4 per cent y-o-y.

“They reflected mostly the carry-forward effect of the partial renewal of capacity with Nilesat at 7/8° West in October 2021. Excluding the 7/8° West impact, revenues were down at a low-single digit pace. On a q-o-q basis, revenues were down by 3.4 per cent, partially explained by one-off effects due to the phasing of contracts. Looking ahead, the impact of the Nilesat headwind will wash out from mid-October 2022; however, revenues will be impacted by the anticipated non-renewal of a capacity contract with Digitürk from mid-November leading to an overall mid-single-digit decline for this application for the Full Year,” said Eutelsat.

Eutelsat has a ‘fill rate’ of 72.9 per cent (down from 73.2 per cent as at June 30th, 2022). Contract values are also down to €3.9 billion (from 4.0 billion as at June 30th, 2022).

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