Eutelsat Communications

Good day and welcome this conference call and webcast held by UTILSAT. Today's conference is being recorded. At this time, I would like to turn the conference over to Eva Bernicke, CEO. Madam, please go ahead. Good morning.

Welcome everyone and thank you for joining us on this historic occasion where we'll present our project to combine OneWeb and UTILSAT. I'm Eva Bernicke, CEO of UTILSAT and I'm joined by Neil Masterson, CEO OneWeb, as well as, on my side, the UTILSAT team with Michel Acibert, Deputy CEO, and Sandrine Theran, our CFO. Before we actually start discussing in detail the combination of UTILSAT and OneWeb, we want to give you a quick rundown of UTILSAT's financial year 22 results, which has just been finalized by the end of June. and which are also published today. The full earnings presentation with the usual level of quite a lot of detail is available on our website. In order for you not to be listening to me the whole time, I propose for Sandrine to take us through the UTLSAT 22 results. Over to you, Sandrine.

Thank you, Eva, and good morning, everyone. We delivered a robust performance in fiscal year 21-22, with revenues slightly above the midpoint of our guidance range, a stable industry-leading profitability, and a continued strong free cash flow generation, which is well above our range of objectives. In detail, revenues for the five operating verticals stood at 1,148,000,000 on a reported basis, and 1,121,000,000 at the 1.20 euro dollar rate on which our objectives were based. This represents a 3.8% decline on a like-for-like basis and sits slightly above the midpoint of our expected range of 1,110,000,000 euros and 1,130,000,000 euros. In spite of this decline, we delivered an industry-leading level of profitability with a 75% EBITDA margin stable year-on-year. Cash capex amounted to 280 million euros. It is lower than last year which was characterized by anticipated leases and ECA repayments and well within our 400 million envelopes. Discretionary free cash flows to that 443 million euros on a reported basis On an adjusted basis, as per financial objectives definition, which are notably based on a 1.20 euro dollar rate, it stood at 460 million euros, well above the range of objectives of 400 to 430 million euros. Our net debt to EBITDA ratios to that 3.27 times versus 2.88 times last year, an increase which reflected our investment in OneWeb. We remain comfortable compared to our medium-term objectives of around three times, considering that we still expect to receive the Phase 2 of CBAN proceeds, which represent $382 million pre-tax. and our recommended dividend per share of €0.93 stable compared to last year. In the context of the transaction announced today, a script option will be proposed to shareholders. With a robust backlog, An industry-leading profitability and a proven ability to generate high levels of free cash flow, UTELSAT is in a strong position to face the challenges of fiscal year 2022-2023, which is expected to be the last year of transition before a return to growth from fiscal year 2023-2024, driven by new in-orbit resources. Broadcast revenues trend is expected to materially improve in fiscal year 2022-23 relative to fiscal year 2021-22, standing at minus 6.9%. Nevertheless, while the impact of the Nilesat headwind will wash out from mid-October 2022, revenues will be negatively affected by the anticipated non-renewal of the capacity contract with DigiTurk, leading to an overall mid-single-digit decline for this application. Data and professional video revenue trend in 23 will remain largely in keeping with the mid-single-digit decline trend reported in fiscal year 22, minus 4.2%. Government services revenue will reflect, on one hand, the ramp-up of UTELSAT quantum, and on the other, the carry-forward effect of fiscal year 22 below-average renewals. The outturn of the fiscal year will also remain dependent on the outcome of future renewals. fixed broadband and mobility will keep growing in fiscal year 23, although at a slower pace compared to the massive double-digit growth recorded in fiscal year 22, respectively plus 36% and plus 15% ahead of the arrival of incremental capacity. Taking these elements into account, we expect to generate revenues from the five operating verticals of between 1 billion and 150 million euros and 1 billion and 180 million euros in fiscal year 23 based on a euro-dollar rate of 1.00. This represents a minus 4% like-for-like decline at midpoint versus fiscal year 22 in keeping with the trend of fiscal year 22. Thanks to the new capacity, including notably the firm pre-commitment secured on UTELSAT Connect VHTS and UTELSAT 10B, revenues are expected to resume growth from fiscal year 24. Cash capex will not exceed 400 million per annum for each of the two fiscal years, fiscal year 23 and fiscal year 24. we will continue to leverage all measures to maximize cash generation with an objective of adjusted discretionary free cash flow expected at an annual average of 420 million euros at a euro-dollar rate of 1 for fiscal year 23 and fiscal year 24. This is equivalent to a cumulative adjusted discretionary free cash flow generation of 1,361,000,000 euros over three fiscal years, fiscal year 22, fiscal year 23, and fiscal year 24, at a euro rate of one. Or put differently, at an average annual free cash flow over the three years exceeding 450 million euros. We remain committed to a sound financial structure and continue to target a medium-term net debt to EBITDA ratio of around three times on a standalone basis. As far as dividend is concerned, a €0.93 per share dividend will be proposed to the upcoming AGM with a script option. Now, ending over to Eva.