Eutelsat Communications

Hello and welcome to Yiddlesat full year 2024-2025 results. My name is Laura and I will be a coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, Please press star zero and you will be connected to an operator. I will now hand you over to your host, Jean-François Fallagé, CEO, to begin today's conference. Thank you.

Hello, good morning. Welcome. Thanks for joining us today for Eutelsat's full year 2024-2025 results presentation. My name is Jean-François Farachet. I'm the CEO of the company and I'm joined today by Christophe Caudrelier, which is our CFO, and Jonathan Arlington, which is our head of IR. Let's go directly to the presentation on today's agenda. We will obviously run through the key events of this year, the operational performance, the financial performance, and of course we will wrap up with the strategic and financial outlook. So starting with a reminder of the key highlights of last year. Clearly, last year has been a pivotal year for Utilsat. First, I am pleased to report that we delivered a solid financial performance aligned with expectations. Total revenues have reached 1,244,000,000, which is up 1.6% like for like. The four operating verticals contributed to 1,226,000,000 revenues. Up 0.8% like for like. And most notably, our LEO low earth orbit segments saw year-on-year revenue growth exceeding 80%, reflecting the increasing commercial traction across geographies and use cases. These LEO revenues now represent 15% of all group revenues. That is reflecting the substantial growing demand for LEO capacity and that across all verticals. Over the past year, we have provided satellite capacity to Ukraine. We have also signed key agreements with European institutions, including a massive framework agreement with the French Ministry of Armed Forces and a contract with the UK Foreign and Commonwealth Office. These milestones are reflecting our growing role as a trusted partner in Europe's sovereign digital infrastructure. We announced a capital increase of 1.5 billion to support our long-term strategic roadmap. This initiative is backed by all core shareholders, including the French state and His Majesty's Government of the UK, and this is expected to be completed by the year-end. This financing will strengthen our capital structure, accelerate deleveraging, unlock investments capacity to support both the continued expansion of our new network and our future role in IRI Square Constellation. In parallel, we are pursuing a complementary debt refinancing plan to further enhance our financial flexibility. Now let's have a look at the operational performance. Please note that all the comments I will make on these numbers are relating to like-for-like variations, EMS on a constant currency and perimeter basis. Our total revenues for full year 2024-25 stood at €1,244,000,000. This is up by 1.6%. If we look again at the operating vertical revenues, they are up by 0.8%. And our EU revenues amounted to €187,000,000, up by 84.1%, again showing the strong demand momentum. Our adjusted EBITDA stood at 676.2 million on June 30th and it was stable while the adjusted EBITDA margin stood at 54.2%. Now, if we look at our CAPEX We had 450 million euro capex last year, which is below the level of 24 due to the phasing of the constellation, the Leo constellation renewal. And our net debt to EBITDA was 3.88 times. These financial results were in line with our projections of operating vertical revenues around the same level and an adjusted EBITDA margin slightly below the level of the previous year. Let's have a look now at our different segments. Video is representing 50% of the revenues with $608 million, a decline of 6.5%. Fixed connectivity revenues are representing 20% of the group revenues, and they grew by 4.3%. Government services represent 17% of our revenues and are growing by 24%. Mobile connectivity revenues are representing 13% of the total group revenues and they were stable year-on-year. Other revenues of 17.5 million are actually coming from recognition from IRA Square revenues and edging amongst other things. Let's now have a look at these segments a bit more in detail. Starting now with video. So revenues video were down year-on-year by 6.5%. This is clearly reflecting the maturity of this legacy business. Jutelsat leading video hotspots nevertheless continue to attract broadcasters, notably Hotbird. Hotbird that is at 13 degrees east. which saw the renewal of capacity agreements with long-standing customers, the Swiss Broadcasting Corporation, for instance, while we had We.TV, which is the global ad-supported streaming TV network that signed a new deal to add free-to-air streaming channels to the hotbed satellites. The fourth quarter revenues on this segment stood at 147 million, down by 608% year on year. And they were broadly a stable quarter on quarter. And what I want to state here on the video segment is that, as we announced recently, Eutelsat has removed several more Russian channels from its fleet to be compliant with the latest directives of our national regulator, ARCOM. The impact on revenues of the removal of this channel is estimated at 16 million euros and a similar amount of EBITDA loss in 2025-2026. Let's now go to the fixed connectivity vertical. Revenues there stood at 247 million. They were up by 43%. This is mainly thanks to the continued growth of the geo-enabled connectivity solutions. And that is offset by more challenging conditions for the geo-enabled solutions. including for instance the contract on which we ceased revenue recognition with team in Italy on connect the HTS the fourth quarter revenues to that 69 million they were down 14 percent year-on-year this reflects again here last year comparison base because last year was boosted by by a high level of terminal sales and recognition of catch-up revenues that explained this year-on-year quarter decrease. Quarter-on-quarter revenues were up 21%, and that, again, thanks to LEO revenues performance. Amongst recent commercial wins on the fixed connectivity on LEO, Eutelsat and Orange signed an agreement for LEO Capacity that is going to enable Orange Group to strengthen its satellite solutions portfolio with Leo connectivity solutions for its enterprise and government customers. And of course, that will be for them a potential support on their mobile backhauling globally. Let's now go on the vertical segment on government services, where we stood at 211 million. That segment grew by 24% year-on-year, thanks to the growth of LEO-enabled solutions, notably with the services we delivered for Ukraine, and as well the increased demand from other non-US governments, such as Taiwan, for instance. The fourth quarter revenues stood at 65 million, up by 41% year-on-year, and 38% quarter-on-quarter. In June 2025, we inked a major $1 billion investment. 10-year framework agreement with france armed forces ministry in the context of the nexus program this will reinforce the french military space communication model by combining military and civilian resources these civilian resources being brought to the french armies by utel saturn web Elsewhere, we are also proud that we signed a contract recently with the UK FCDO. The OneWeb Leo constellation will provide high-speed, low-latency connectivity for British embassies, high commissions, consulates, and as well as broader UK government activities globally. We also signed an extension of the contract with MBS, our German distributor, which is a multi-year, multi-million euro agreement to provide Eutelsat 1 Weblio connectivity to government and institutional customers across Europe. Let's now look at the mobile connectivity revenue segment, which stood at 160 million, actually stable year-on-year. This reflected growing demand for LeoBay solutions, notably here in maritime, and that was actually offset by lower geo revenues. On the commercial front, we signed last week a deal with India's station SAPCOM to deliver LEO connectivity services to the global maritime sector, which is an important contract for us. What I want to state as well is that in this mobile segment, aero mobility is really gaining traction. We have now over 100 airplanes installation which have been completed out of a backlog close to a thousand aircraft. And we have customers that are major airlines, including, for instance, Air Canada or Delta Airlines. Now let's have a look at our backlog. As you can read there our backlog is strong and stood at 3.5 billion euros on June 30th 2025. This is an equivalent of 2.8 times our 24-25 revenues and connectivity is representing 57% of this backlog. Now, I will hand over to Christophe, our CFO, that is going to comment for you our financial performance. Christophe, please. Thank you, Jean-Francois.

Good morning, everyone. Starting with profitability. Reported EBITDA stood at 676.2 million euros at the end of June 2025, compared with 718.9 million euros a year earlier, down by 5.9%. This gap is explained by the missing one web quarter in fiscal year 24. On a like-for-like basis, the EBITDA was stable. the adjusted EBITDA margin stood at 54.2% at constant currency. It was 54.4% reported versus 55% a year earlier and 59.3% reported. OPEX were 73.4 million higher than last year, reflecting the consolidation of OneWeb over 12 months compared with only 9 months in fiscal year 2023-2024. On a pro forma basis, costs were up 3.5%, reflecting the ramp up of LEO activities to full operational run rate. This impact was mitigated by synergy benefits from the integration of OneWeb and strict cost control measures, among which IT costs and OneStream implementation. Group share of the net result was a loss. of €1,081.9 million versus a loss of €309.9 million a year earlier. This reflected other operating expenses of €777 million compared to €208 million last year, including an impairment of 535 million euros in respect of geo-goodwill in H1, and a further 186 million euros in geo-satellite impairments. DNA of 808 million euros versus 702 million euros a year earlier, reflecting the perimeter effect of OneWeb, as well as higher in orbit amortization due to entry into service of UTELSAT-3060 and 20 LEO satellites during the first half. And these have been partly offset by a lower GEO on-ground depreciation. Then, a net financial loss of 201 million euros versus 124 million euros a year earlier. mainly reflecting the evolution of foreign exchange gains and losses and higher interest costs. A corporate tax inflow of 6.7 million euros versus an inflow of 28.3 million euros a year earlier, reflecting the non-recognition of deferred tax for French entities in 24-25. And finally, losses from associates of 2.4 million euros versus 22.8 million euros last year, reflecting the contribution of the stake in one way in the first quarter of financial year 23-24, now fully consolidated. Let us move to CapEx. Gross CAPEX amounted to 449.8 million euros compared with 517.1 million euros a year earlier. This decrease reflects lower geosatellite program expenditure and lower LEO on-ground CAPEX, as well as the phasing of CAPEX related to the renewal of the LEO constellation. Capital expenditure is expected at a level of 1 to 1.1 billion euros in the fiscal year 2025-2026, reflecting the timing of key milestones, which are including the order of an initial batch of 100 additional satellites in December 2024, as well as the upcoming order of 340 further satellites for the LEO constellation. Going forward, CAPEX will remain focused on new activities in line with the group's strategic vision, primarily on the Gen 1 follow-on program. Geo-CAPEX, on their side, will ensure service continuity. At the end of June 2025, net debt stood at €2,626.6 million, up by €82.2 million versus the end of June 2024. It reflected capex-related movements and higher financial costs, partially offset by net cash flow generated by activities, as well as the reclassification under IFRS 5 of the liabilities of the assets held for sale in the context of the disposal of the passive ground infrastructure for more or less 100 million euros. This disposal remains on track for the foreclosure at the beginning of calendar year 2026. As a result, the net debt to adjusted EBITDA ratio stood at 3.88 times, compared to 3.79 times at the end of June 2024. The average cost of debt after hedging stood at 4.37%, down from 4.87% in fiscal year 2023-2024. This decrease reflects both the reduction in short-term interest rates on the Group Financing Index on variable rates, as well as the maturity in January 2025 of the cross-currency SWAPS portfolio. The weighted average maturity of the group's debt stood at 2.5 years compared to 3.5 years at the end of June 24. Liquidity remained strong, with undraught credit lines and cash around 1.07 billion euros. Now back to Jean-François to comment the outlook and next steps.