EuroBusiness Media (EBM): Eutelsat, leading European operator for fixed satellite services, reports results for the first half of its fiscal 2011-2012. Michel de Rosen, welcome. You are CEO of Eutelsat. What are the highlights of these first-half results?
Michel de Rosen: It’s a solid first half. Revenues grew by 4.6% and 6% at constant currency. EBITDA is at 79.4%, which is a record in our industry. Net profit is at a healthy margin of 26%. Last but not least, our backlog grew by nearly 10% to €5.3bn, which is more than four times our one year revenue. What is interesting is that all cylinders worked well. Our number one business, which is our Video business grew well, boosted by our strong presence in emerging markets and by the accelerated development of high-definition channels, which in one year went from 5% of all our channels to 7% of all our channels. Our second application, which is Data and Services grew at 2.2% only, because during part of that period capacity was constrained; that constraint has now been removed. Multi-Usage delivered very strong growth, helped by very good renewals of contracts last September. Of course, in Multi-Usage, our fleet is geographically very well positioned to serve the markets in the Middle East and Central Asia.
EBM: You successfully refinanced your debt. What kind of financial flexibility does this afford you now?
Michel de Rosen: The successful refinancing of €1.8bn of our debt, at the end of 2011, helped us achieve two important results. One is to diversify the source of our funds. At the end of 2009, 100% of our debt was credit from banks. Now, 65% of our debt is in bonds. So that’s one important achievement. The second accomplishment with this refinancing is to extend the maturity of our debt. Six months ago, the maturity was 3.8 years. Now, as of December 2011, the maturity is 5.1 years. So a significant extension of the maturity of our debt.
EBM: What is your update today on KA-SAT with 7 months of operation?
Michel de Rosen: Technically, the satellite is working well, the services are very good and customers are happy. This is of course fundamental. Second, there is the B-to-B-to-C application, the two-way service. We are lining up more and more distributors - large, medium-sized, smaller ones - all across Europe and now even in North Africa. This is the foundation for future success. It’s going very well and very promising. On the other hand, there is the B-to-B segment, or the Professional segment. There, the start has not been as rapid as we expected but our teams our now fully mobilised for a successful ramp-up.
EBM: What is your outlook for the second half of this fiscal year?
Michel de Rosen: First comment, Adrian, on the fiscal year is that profitability remains strong and I confirm today our target to deliver more than €955m EBITDA for this year. Second, let me now speak about revenues. We have launched two new satellites, which has increased our capacity, and demand will continue to grow. This allows me today to confirm our target in terms of revenues to deliver more than €1.235bn. However, we believe today that this target will be more challenging than what we thought when we started the year in July. Why is that? For three reasons. One reason is that, no surprise, we see some pressure in some applications or regions, on prices, notably in the Balkans for video or in Africa for data. That’s one factor. A second factor is our Multi-Usage business. We see demand in that field, we believe that it will continue to grow but at a slower pace than in the recent past and with more volatility. The third factor is the slow ramp-up of the B-to-B business of KA-SAT, which I described earlier.
EBM: And lastly what is your medium-term outlook for the next couple of years?
Michel de Rosen: Adrian, we are in markets, applications, regions, where demand continues to grow and will continue to grow for quite some time. And we are investing to increase our capacity. We will be launching new satellites next year and the year after and the year after. So this allows me to confirm our guidance for the period 2011-2014. Specifically, our target is to deliver a growth of our revenues of above 7% per year during that period. We also expect that our EBITDA margin will be for each of these three years above 77%. And during that period we want to continue to serve our shareholders well with a pay-out of our net profit comprised between 50% and 75% for our dividend.
EBM: Michel de Rosen, CEO of Eutelsat, thank you.
Michel de Rosen: Thank you Adrian, thank you for your time.
