SES (SESGL) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue was €978 million, down 0.6% year-over-year at constant FX, with Adjusted EBITDA of €525–528 million and margin at 54%, both stable year-over-year.

• Networks segment grew 5.0% year-over-year, now over 54% of total revenue, driven by 8.4% growth in Government and 11.1% in Mobility, while Video declined 6.7%.

• Adjusted Net Profit was €111 million, down €5 million year-over-year, reflecting higher depreciation, amortisation, and tax expense.

• The Intelsat acquisition is progressing, expected to close in H2 2025, anticipated to double Networks revenue and deliver €370 million in run-rate synergies.

• Launches of O3b mPOWER and ASTRA 1P satellites in H1 2024 support long-term growth and media business stability.

Financial highlights

• Adjusted Free Cash Flow was €146 million, up 69.8–70% year-over-year, aided by lower CapEx.

• Contract backlog at €3.8 billion, with ~€430 million in new signings and renewals in H1.

• Dividend of €0.50 per A-share and €0.20 per B-share paid in April 2024; interim dividend of €0.25 per A-share and €0.10 per B-share to be paid in October 2024.

• Share buyback program of up to €150 million ongoing, with over €18 million FDRs repurchased and 16 million A-shares purchased by 30 June 2024.

• Adjusted Net Debt to Adjusted EBITDA improved to 1.7x from 3.6x a year ago; cash & cash equivalents of €2.1 billion at 30 June 2024.

Outlook and guidance

• Full-year 2024 revenue expected at €1,940–2,000 million, with Adjusted EBITDA in the upper half of €950–1,000 million range.

• CapEx guidance maintained at €500–550 million for 2024, with an average of €350 million annually for 2025–2028.

• Networks growth is expected to mostly offset lower Video revenue.

• Combined company (post-Intelsat) expected to generate over €1 billion normalized adjusted free cash flow by 2027–2028, with annual CapEx of €600–650 million (2025–2028).

• 2025 media revenue to face a 5% headwind due to a Brazilian customer bankruptcy, with mitigation planned via cost efficiencies and new revenue streams.