EuroBusinessMedia (EBM): Eutelsat Communications, Europe’s leading satellite operator, reports full-year results for 2011-2011. Michel de Rosen welcome. You are the CEO of Eutelsat Communications. You delivered another year of solid results. What were the main drivers behind growth in 2011-2012?
Michel de Rosen: We are happy to deliver another year of solid growth – 4.6% of growth of our top line. There were a few engines to that growth. The main engine is our number 1 business, the Video business, which grew by 5.8%. In that growth of Video business, a star position did particularly well, it’s the 7 West position which is the hottest position in the Middle East and North Africa. Value Added Services also grew very nicely at 8.5% and our Multi-Usage business grew also at a double digit pace of growth, less than previous years – so it is slowing down – but still a nice growth. So we had several engines to this performance.
EBM: Your updated growth outlook shows slightly lower growth expectations than the previous one, both in terms of top line and margins for the coming year. What are the reasons for this?
Michel de Rosen: Well, the most important factor is that we are telling the street that we intend to grow at a good pace in the coming three years. Indeed, our goal is to have an average growth rate of our revenues in the coming three years of 5% - 6%. Not many companies, not many industries can have such a goal. So this is good, it’s growth, it’s positive. Why is it a bit less than what we were planning a year ago? I would say one reason is that the general environment is indeed more challenging than it was a year ago. And then there are two specific factors, our Multi-Usage business is not quite as energetic as it was a year ago. And number 2, the roll-out of our B2B KA SAT services is slower than what we expected. But overall, this is still 5% – 6% - pretty good.
EBM: You refer to delays in the "go to market" on your KA SAT satellite. Does this alter the longer-term outlook for KA SAT?
Michel de Rosen: No. KA SAT is a great satellite. It’s working very well. It’s what is called a high through-put satellite. It delivers fantastic services and the echoes we get from our customers are very positive. However, even if this is a great technological success and a very good service delivered to customers, we underestimated the “go to market” challenge, so this means it has taken us more time to put together either the solutions in the B2B arena or the system the distributors, the installers in the B2B2C field. But this is only a question of timing. We still believe that this satellite, KA SAT, and its services will grow and will deliver both growth, profits and value to Eutelsat and Eutelsat shareholders.
EBM: You recently acquired the GE 23 satellite. What are the benefits of this acquisition?
Michel de Rosen: Let me be clear. We have not yet acquired this satellite. We have signed the agreement, but the agreement is not yet closed. We plan to close it in the second half of 2012 calendar year. However, we expect that this closing will not be a problem. Your question is “Why did we sign this deal?” The main reason is that we have said for years that we want to increase our presence in the regions that offer the most potential growth, and Asia is one of them, with Latin America. This satellite increases our footprint in the Asia-Pacific region and it is a perfect complement with the Eutelsat 70B satellite that we will launch at the end of the year. Together they will allow us to cover most of Asia and the Pacific. There is another factor which is that this satellite is in great shape, it’s a very good satellite, it comes with customers, it comes with an orbital position and we also got it at a quite good price. So it’s a deal that is very good strategically, but also financially.
EBM: You have a fairly substantial launch program in the coming years. What are the main geographies and applications you are targeting?
Michel de Rosen: Our strategy is clear. We are not scratching our head wondering what should we do. We know what we want to do. We work in three applications. Video, Data and Value Added Services, and Governmental Services. That’s where we are and that’s where we want to be in the coming years. In terms of geography, we were the first of the large satellite operators to enter the so-called emerging markets which are the markets where there is the most growth. This is Central Europe, Eastern Europe, Middle East, Central Asia and Africa. And that is where we intend to bring most of the new capacity that is currently being manufactured and that will be new satellites to be launched in the coming years. All in all, the seven satellites, that are either already being manufactured or that will be ordered very soon, will increase our capacity by 28% and at the same time, of course these new satellites will replace older satellites and will help the rejuvenation of our fleet.
EBM: Lastly, you increased your proposed pay-out floor for the next 3 years. What can we expect in terms of shareholder returns in the future?
Michel de Rosen: Since it became public, Eutelsat has always wanted its shareholders to participate fully in its success, growth and prosperity. We announced today that we intend to change the pay-out policy of the company. In recent years, our target was to distribute between 50% and 75% of the net profit to our shareholders. What we are now announcing, which is what we intend to do in the coming three years, is that the pay-out will be between 65% and 75%. So the floor will not be 50% anymore but 65%. It’s a shareholder-friendly initiative and specifically for this year, at the meeting of our shareholders in November, we are recommending to them a dividend of €1 per share, which means an increase of 11.1% to the dividend of the previous year. This is a way for us to express confidence in our future and in our ability to continue to grow our revenues and our profits and it’s also a sign of how much we care about our shareholders.
EBM: Michel de Rosen, CEO of Eutelsat, thank you very much.
Michel de Rosen: Thank you
