Ses Sa Glbl Fid Dep Shs

question. I will now hand over to your host, Mr. Richard Whiting, Head of Investors Relations, to begin today's conference. Thank you.

Thanks. Good morning, everyone. Thanks for joining this analyst and investor call for our half-year results. This morning's presentation was uploaded along with the press release to the investor section at SES.com if you don't already have it. As always, please note the disclaimer at the back of the document. In a moment, Steve Collar, CEO, will present the main business highlights, followed by Sandeep Jalan, CFO, to cover the financials in more detail. After some closing remarks from Steve, we will take your questions. With that, I hand over to Steve.

Thanks very much, Richard. Good morning, everyone, and thanks for joining us this morning, and hope that you are all enjoying the summer. I'm going to start on page three with the highlights, and look, I'm really pleased with the performance of the business in the first half. We've delivered a very solid set of results with the business in good shape, on track to deliver on our financial outlook and objectives for the year, and making really good progress on our strategic objectives as well in one of the busiest years on record for SES. Revenue of 899 million euros was 3% up on a reported basis, while adjusted EBITDA of 545 million euros was flat year on year, reflecting a solid EBITDA margin and excellent control over discretionary spend. We have good visibility towards full year with over 90% of our revenue contracted and we fully reaffirm our 2022 outlook. Our networks business grew in the first half by 2% and with growth accelerating in the second quarter. We've signed some nice deals in the first half that will contribute to ongoing growth through the year. While in video, similarly to our performance in 2021, we've got the majority of our business done early in the year, securing important renewals and executing well in core markets such as DACH, meaning that we'll only have limited business left to secure and good visibility towards our full-year outlook. The combined backlog for SES17 and O3BM Power is continuing to grow, with $130 million added since the start of 2022, taking our total backlog to $930 million. It feels great to have SES17 in operation above the Americas, delivering services for our customers and meaningfully ahead of other KA high-throughput satellites planned for the region, and at a time where both the aero market and cruise market are recovering rapidly post the COVID environment. Our O3BM power satellites have entered final testing and will launch all six of the initial Constellation this year, with service introduction expected in Q2 2023. This is a game-changing investment for SES and will be a major component in driving our business for the next decade, particularly in the high-value, high-flexibility and high-throughput segments, and our recent wins in cruise underscore the right to win that we have created with our differentiated infrastructure and capabilities. This is perhaps even more true in the government segment, and I'm delighted that this week we've closed the acquisition of DRS Global Enterprise Solutions As I've said previously, I'm a huge fan of this business. It's one that we proactively selected as a key target and one that fits well with our value proposition, our network capabilities. It actually expands significantly our value proposition towards government customers and end users, and you'll be hearing more about this combined business going forward, a business that will be 50% of our network's business and 25% of our global revenue. Lastly on this slide, our C-band execution continues to be strong with clearing proceeds proceeding ahead of schedule and the successful launch of SCS22 in the quarter providing real momentum. We've received our first significant reimbursement payment and we're well on track to capture the $170 million of additional gross cash proceeds from our agreement with Verizon, having already completed more than half of the clearing. So with that summary, I'll move fairly rapidly through the remaining slides, starting on page four with video. So the trajectory of our video business remains fully consistent with our expectations, with a decline of 5% year-on-year, including the termination payment from Nordic Entertainment, or NENT, booked in Q1, which keeps us whole from a revenue perspective in the Nordic region for 2022. The end of our wholesale agreement with DISH in the US in November last year is the other key driver in year-on-year comparisons and will wash through by the end of this year. Pricing on renewal continues to be stable to increasing, reflecting the pricing power earned from having the largest video neighborhoods in the industry and leading penetration of high definition. More than 20% of our video contracts and revenues benefit from indexation clauses. As I said, we've got a lot of good work done early in the year with €150 million of renewal revenue added to backlog in the first half, most notably the latest extension signed with Sky UK in a deal valued at €85 million on the back of a €90 million deal that we announced with Sky last year. In Germany, our HD Plus consumer platform continued its good momentum from last year and is now truly a hybrid platform with the launch of our HD Plus IP and HD Plus to-go products. Our subscriber base remains stable to growing, and while we remain vigilant, we see no discernible impact from rising inflation in Europe. The early work done and ongoing delivery in our consumer business means that we have good visibility to our full-year outlook in video. More than 90% of our outlook contracted. And given that our consumer business renews monthly or quarterly, this reflects a very high percentage of non-HD plus business secured for the year. So onto networks on page six, where the sustained and positive deal flow is translating into revenue acceleration with Q2 growth of 4% on both the year-on-year and quarter-on-quarter basis. Overall in H1, that means an uplift of 2% year-on-year driven by excellent performance in mobility and fixed data, while the new wins we've seen in government are not fully compensating for headwinds caused by the rapid withdrawal from Afghanistan in Q3 last year. Double digit growth in the first half in mobility is on the back of the ongoing recovery in cruise, where we're adding new ships and new brands to the customer base, but also renewed demand for bandwidth in commercial aviation and growth in our commercial shipping business. In fixed data, we're growing thanks to the expansion of mobile backhaul solutions to support telcos and carriers in Asia and Latin America, as well as capturing new cloud revenues and opportunities. We continue to stand out among our peers in delivering growth in fixed data, and I believe this reflects the differentiated solutions that we bring to the market. This will accelerate further with the implementation of ARSA on SES17, who have taken all of the capacity over Argentina, and later with the introduction of O3VM Power. SES17 will be the main growth driver ahead of O3VM Power, and this is a good segue to page six and the key deals signed in the first half across our primary growth driving investments. Getting SES-17 on station and serving customers is significant for our business, particularly as we've secured an important time-to-market advantage versus other high-throughput satellites to be launched into the Americas over the next few years. We're transitioning the Thales in-flight network across onto SES-17 as we speak, and performance of the satellite and network is awesome. On O3B Empower, the first two satellites are in the final stages of testing. As we can see in the picture here, this is a fully assembled O3 Empower satellite heading into the thermal vacuum chamber. And we've got three launches scheduled from the Cape, firm launches with SpaceX for the initial constellation this year. We've had to be patient for the arrival of O3B Empower, but we're building this capability for the next two decades of growth for SES, it being scalable, flexible, and the highest performing in the industry now or in the future, and expected to start delivering services in Q2 2023. The flexibility and unique positioning of both of the MPOW was highlighted with the recent NASA award, where we'll be using our constellation to relay high-performance data from Earth-sensing satellites, something that MEO and MPOW are incredibly well suited for, and opens a new market for us in other high-end data relay in space, leveraging our MEO platform. Combined backlog for SES17 and O3BM Power is up 16% year-to-date at $930 million, with our anchoring deals with GEO on Empower, RSAT on SES17, two new cruise customers, two new fixed data networks in the Americas, and a showcase deal to serve offshore oil and gas and mining in EMEA and Asia. Turning to page seven and the really good news earlier this week of the closing of our acquisition of DRS Global Enterprise Solutions, an acquisition that's been over 18 months in the making. Over decades, the GES team has forged a reputation for delivering solutions to meet and exceed the needs of some of the most demanding of U.S. government customers and in some of the hardest places on earth to deploy services. And together with our own government solutions team in the U.S., we represent, I believe, the two best service providers integrated and trusted partners for the U.S. government. The two businesses, when combined, will create a scaled solutions provider and the number one trusted partner serving the multi-orbit satellite communications need of the U.S. government and supporting missions anywhere on land, at sea, or in the air. And it's incredibly well-timed with the launches of both SES17 and in particular O3BM Power, 40 to 50% of whose revenue we expect to come from government solutions. The combination of DRSGES with SESGS will unlock 25 million of annualized run rate synergies with networks increasing to around 50% of our overall business equal to video and government will represent half of this as our largest business segment in terms of revenue on the network side. Given the closing only a couple of days ago, the financials from Global Enterprise Solutions acquisition are not included in our reported numbers today, but will be as of Q3. And finally, for me on page eight, I think I promised you that we show you this slide when we showed you this slide last quarter that you can expect to see green ticks appearing as we execute on one of the busiest years in our history in terms of delivery on key strategic projects. And that's very much the case this quarter with SES 17 on station and serving customers. SES 22 launched and we've confirmed today that it's in service and we will begin transitioning customers as early as next week. The closing of the GES acquisition and more than 50% of the additional clearing for Verizon already completed. Next up, another CBAN launch at the end of September followed by three O2D Empower launches in Q4. Great progress and super pleased with the way that the business is executing. and firing on all cylinders. And with that, I'll hand over to Sandeep.

Thanks, Steve. Good morning, everybody. Turning to the financial highlights on page 10, we are very pleased with an overall solid financial performance in first half of this year. Reported revenue was up 3%, net profit up 11%, and net debt 9% decrease year over year. So first speaking about the group revenue, which were close to 900 million euro, they were up year by 24 million or 3% on a reported basis. Besides the solid underlying revenue performance, this also reflects the positive effect of the stronger US dollars, which benefited first half of these revenues by about 43 million euros when compared to the first half of last year. Adjusted EBITDA of 545 million is at the same level as in first half of last year, and it represented a robust margin of 60.6%. EBITDA also benefited from positive effect of stronger USD by 23 million euros. Adjusted net profit improved by 11% year over year. to Euro 168 million Euro for first half of this year, and thanks to improvements in items also below EBITDA, which I'll explain in the next slide. We continue to maintain a strong balance sheet with leverage at 3x at the end of first half of the year. Finally, we are fully on track to deliver our full year outlook for 2022. Looking now at the page 11, net profit bridge, I'll explain in more details. As you can see, the adjusted EBITDA performance was driven by three main components. First, as I said earlier, the stronger USD versus Euro, which contributed 23 million in our EBITDA, and this comprised the net effect of revenue plus 43 million and OPEX minus 20 million year over year. Second impact was coming from 10 million periodic revenues, as we explained during quarter one results. This was in video. pertaining to Nordic services. And third component was the return to growth in networks where we saw revenues up year over year by 2% for first half of the year, and for quarter two it was an increase of 4% year over year. And these effects were offset by video revenue decline in line with our guidance. Meanwhile, recurring OPEX was kept flat year over year when excluding impacts of stronger U.S. dollar, and this reflects a continued strong control on our discretionary costs. Below adjusted EBITDA, we have further positive effects, leading to an increase of $16 million, or about 11% year-over-year increase in adjusted net profit. Adjusted net profit rose to $168 million in the first half of the year. And this comprises of three main components. Depreciation was lower year over year by 11 million due to lower depreciable base. We continue to reduce our interest costs by a further 8 million for first half of the year. And forest gain in first half of the year were 26 million, and this was higher when compared to last year by 6 million euros. These positive effects were partly offset by a high tax expense of $10 million year over year, which is mostly non-cash and pertaining to certain Forex-related adjustments in our tax expense bookings. Reported net income for the first half of the year was $101 million, and this was explained by three major exceptional items. Next, C-band expenses for the period, we accounted for $13 million during this period. Other significant special items were $27 million, and including 24 million of impairment expenses that we have recorded for a few geo assets, mainly related to increase in the discounting rates, which went up when compared to end of last year. Tax on special items, including CBAN, were 27 million euros, So turning now to the balance sheet on page 12, adjusted net debt was 9% lower compared with June last year, thanks to solid business cash generation and the nearly 1 billion pre-tax proceeds that we got in our pocket from phase one C-band clearing. During June, we proactively and successfully issued a new $750 million seven-year euro bond with a coupon of 3.5%. With a strong liquidity, we can well address now the upcoming $750 million maturity, which is set for early next year. So we have no other senior debt maturities now before 2024. On C-band, there is a timing difference because we must first expense the cost before submitting the invoices to the clearinghouse as part of the reimbursement process. To date, we have spent about $1.1 billion, and over $520 million is already reimbursed including $560 million that we received in first half of this year. We had a cash balance of $1.7 billion at the end of June, and this allows us to meet the investment needs during second half of this year. As you have seen about the GS acquisition, we paid $450 million this week, and CapEx outflows in second half related to Empower for the first half. six satellites, which will get launched in quarter four. Those investment needs can be well met by these cash balances. On page 13 now, we remain on track to deliver our full year 2022 financial outlook. And on top, we continue to benefit also from Forex effects, which are positive for us. As Steve has mentioned, we have good visibility for our revenue outlook range of $1.75 billion to $1.81 billion. with already more than 90% of the revenues contracted. Our adjusted EBITDA range of 1.03 billion to 1.07 billion reflects a robust margin profile for the year. And as some 50% of our revenue and EBITDA is in U.S. dollar, a stronger Forex rate, as we have said earlier, is positive to our reported financials. As we have guided, each basis point strength of dollar versus euro benefits SES revenue by about $9 million, Positive effect and EBITDA by about half that amount, so roughly about 4.5 million for each basis points movement. And almost neutral effect on the free cash flows due to dollar capex. Euro-dollar rates were 110 in first half of this year compared to 120 in first half of last year. And this has benefited our financial results by about 43 million. year-over-year in revenue, and 23 million in EBITDA, which is net of 20 million OPEX negative effects. USE has strengthened further during recent month, and hence positive effect therefrom may be even stronger during second half of the year than what we have reported during the first half of this year. The year total effects could be in a range of about 100 million revenue and 50 million EBITDA uplift compared to the previous year in terms of Forex effects. And this is more than double the positive effect that we had in the first half of this year so far. A continued stronger U.S. dollar will also benefit the upcoming significant USD proceeds related to C-band, most notably this $170 million of gross payments from Verizon for the additional C-band clearing and $3 billion from Phase II C-band clearing. Each cent movement impacts by about $20 million. on the C-band related proceeds that I mentioned. So at current rates, we could expect about 200 million Euro more of positive effect in our Euro cash flows. Our CapEx outlook remains unchanged at the given exchange rate, and we will see some impacts from Forex, largely neutralizing the positive EBITDA effects that I mentioned earlier. We are happy to have successfully completed earlier this year the acquisition of DRS, GES, ahead of our announced schedule, During coming weeks, we'll be focusing on integration and consolidation of this business and its financials, and we plan to give more financial details together with our next set of financial results. With that, I will hand back to Steve to conclude.

Great. Thanks, Sandeep. So lastly, on page 16, a solid H1 performance and execution in the core of the business, fully on track to deliver our outlook for the year. the closing of the acquisition of the best-in-class U.S. government solutions provider at a time that we're building game-changing space-based capabilities for governments around the world, good progress both technically and commercially on SES17 and O2B Empower with growing backlog, strategic new customers, SES17 in service ahead of the competition, and Empower making good progress through the factory. CBAN continues to be the good news story as well with all clearing fully on track, SES22 launched, SES20 and 21 approaching launch, and our Verizon clearing progressing really well. Much to do between now and the end of the year, so no letting up in the pace as we put in place the key drivers of revenue growth, EBITDA growth, and expanding cash flows at SES for the years ahead. And with that, back to Richard and questions.

Thanks Steve, thanks Danny. Operator, we can go ahead and take the first question.

I wonder if you'd like to ask a question, please press star one. The first question comes from Nick Dempsey of Barclays. Please go ahead.

Yeah, good morning, guys. I've got two questions. So, first of all, I'm sure you can't comment specifically on any rumors in the press, but are you able to talk in general terms about the kind of practical CAPEX synergies mainly that might be achievable from combining two geo-operators, predominantly geo-operators? just in broad terms. Second question, does the delay in Empower impact the launching and coming into service impact your ability to show positive group organic revenue growth for 2023 versus 3?

Great. Thanks, Nick. No, it won't surprise you to learn that we're not going to comment any more than we ever do on market rumors and industry rumors. I think generally what I've said on this call and other calls is that industry consolidation is a good thing and I think will result in sort of rationalization of the industry. Of course, from an SES standpoint, we will do things only in the best interest of our shareholders and would just leave it there. Look, as far as Empower is concerned, I would say, you know, we've seen, yeah, this is a strategic project that is going to, as I say, drive growth for SES for the next decade. It is game-changing in its capability. We're having, as I said, to be a little more patient than we would like. But the good news is that we're fully locked on for three launches this year and have a solid in-service date for Q2, and then no change in our trajectory. So growth's going to be driven by SES17, and in particular with the arrival of O3V Empower in 2023. Same expectations that we have for the business and that we've talked about with sort of growing revenue, growing EBITDA, less CapEx, and growing cash flows. So all consistent with what we talked about previously.

And that's still relevant for 2023? I don't know if you 100% address that.

Yeah, I mean, as I said, no change in terms of the growth thrivers, no change in the fact that the growth is going to come from SES 17 and O2VM Power. We're not going to talk about 2023 specifically in terms of Outlook. We'll do that in December. But in terms of the overall trajectory, fully consistent with everything we've said previously. Sorry, February. I'm being corrected by Richard. We'll talk about that in February. Okay. Thanks, Nick.

The next question comes from Samy Kassab of BNP Paribas. Please go ahead.

Thank you, and good morning, gentlemen. We've all been frustrated with the constant delay in the Empower launch date. So, Steve, can you discuss at what stage of the manufacturing process Empower satellites currently are? Have they moved to the thermal vacuum test phase yet? And if so, what does it tell us about the progress that Boeing has made since our last earnings call a few months ago? And most importantly, what does it tell us about the likelihood of a Q4 launch deadline?

Yes, you can see the pictures, Sammy. So if you look on page six, that is OTBM power in the thermal vacuum chamber. This was actually taken, I believe, a couple of weeks ago. And so this satellite is now nearing the end of its test. And there's not much. There's not much left to do, as you know. By the time you get through thermal vacuum, you pretty much do some final checks and then ship the satellites to the launch base. So that's what we're expecting for the first two. And we're hitting our cadence in terms of the next two and then the next two, which is what we need for the initial constellation. would say happy with the progress as you say it's kind of you know we've had to be more patient than we would like but this is you know it's not unusual that you slip a month or two as you as you get towards the launch as you know we've mitigated by having you know, more, we've got fewer satellites per launch vehicle. We've added a new launch vehicle, so that will get us to orbit more quickly, which is a very good thing. And yeah, fully confident in the launches this year and in service in Q2.

Thank you, Steve. Then the second question, could you comment on the government outlook for the rest of the year with perhaps Afghanistan phasing out and Any other driver, would you expect government to return to growth or stay negative in H2? And lastly... Go ahead, go ahead. Yeah, thanks. Lastly, if the one-web merger goes ahead, Utilsat will be the only company with a Leo-Geo offering. So why do you think clients would take the Mio-Geo combo with SES if they can have the Leo-Geo architecture? Can you elaborate on differentiation, please? Thank you.

Yeah, sure. So on the government side, you're right that Afghanistan was a drag on revenues and sort of continues to show up in the year-on-year comparisons. We are signing. Nice business in government. And I would say, you know, that's sort of underscored by the renewal of the Trojan contract, which is obviously a significant renewal for us, as well as some other business both in the U.S. and in Europe. We are supporting NATO contracts. And other. customers here serving particularly around the defense of ukraine and also kind of strengthening networks generally i would say across europe we've got a great asset there in gov sat and we continue to see demand there i mean look afghanistan was a you know we always whenever something like that happens in the short term it creates a short-term hole but we're definitely seeing that hole being filled and and expect to see that continue through the second half of the year And look, as far as, you know, OneWeb and Udalsat, I don't think an awful lot's changed. I think, you know, clearly, you know, the merger is an open question as to whether that happens and how that happens. But I think in terms of, you know, our analysis, we've always assumed that Udalsat would exist, and we've always assumed that OneWeb would exist in some way, shape, form, or fashion. I think Gen 1, as we've talked about previously, is pretty limited in its capability. And so I think they're thinking about Gen 2, which is... you know, back end of the decade. And listen, we've analyzed an awful lot our competitivity from NEO and how we've differentiated ourselves. And I think we remain incredibly optimistic and incredibly persuaded that the architecture that we're developing is the right one. And not only that, we've been doing it for a decade. We've been operating medium Earth orbit for more than a decade with the original O3BM power constellation So our, sorry, the original O3B constellation, so our multi-orbit isn't theoretical, it's real, and we're delivering that capability to customers today, and that will be even more reinforced when we bring O3B Empower to the market. So I would say nothing's changed. If anything, we have more conviction around our architecture, our solutions, particularly in the high-throughput, high-flexibility markets where O3B We are incredibly strong, and frankly, Leo struggles to play. And so no change, more conviction, and leave it there. Thank you very much.

The next question comes from Ben Lyon of Credit Suisse. Please go ahead.

Thank you for taking my questions. The first one actually was a follow-up on some consolidation. I mean, you've just done a GES deal, so a vertical deal. And maybe from a high level, could you speak about what you think the opportunities are in the market for perhaps vertical or horizontal consolidation? I mean, do you expect the market to go in any particular direction? And the second one would just be on the backlog evolution. I mean, you had a big uptick in Q1, and it's been moving up slightly, but at a slower pace. What's the kind of pipeline going forward on the backlog? Thank you.

Yeah, so look on consolidation, I take the opportunity to reinforce how happy we are with our acquisition of DRSGES. I think you can talk generically about consolidation, but what really matters is does it make strategic sense? Does it drive your business? Is it consistent with what you're trying to do and what you're trying to achieve? And I think we've been on a path and clear about our direction of travel in the network side of the business, where we feel we have a very strong right to win in the higher value segments. And that's very consistent with the architectures that we're building. We've seen that. with our engagement with governments around the world. And so, you know, GEF, as I would say, best-in-class service provider, combined with our existing government services business is an incredibly, you know, good fit, but, you know, entirely aligned with our strategy, with our approach, and with the way that we're building our network's business. So I'd like to think and, you know, happy to say that we're being very thoughtful about, you know, what makes sense for our business, not just sort of generic consolidation. And look, I mean, I think, you know, I've said it as far as horizontal is concerned. I think it makes sense. I think, you know, it helps us. rationalize the industry. You know, I think that there are arguably sort of too many networks and too much capex incoherency in the market. And I think consolidation will help that. But, you know, wouldn't go further than that, other than to say, much like with the acquisition of DRSGES, we're going to do things that create value for SES and create value for our shareholders. And then look, as far as backlog, again, we've sort of spoken about this, that it does tend to be a little bit, you know... sort of variable in any one quarter, but I think the trajectory and the trend is very, very clear. We signed a great deal with Reliance Geo, and we're busy now implementing that, and that will start flowing into the revenues, and that's really, really good. And in this quarter, even if not significant in terms of backlog, because they're not necessarily super long-term contracts, some of the deals we've signed are really strategic and will start contributing revenue early in the life of O2B Empower when we talk about the deals on O2B Empower. And on SES17, the RSAT deal is a really nice deal. It's basically for all of the capacity in Argentina. And again, while not a super long-term deal, I think we have the view that that deal will sort of continue beyond the original contract date. So I would say backlog is a good guide. It doesn't tell the whole story. And it is, you know, it's quarter on quarter, difficult to sort of predict. But I think the overall trajectory is really super positive. $930 million of backlog for these growth assets represents a really, really good base. And we continue to grow from there. Great. Really helpful. Thank you. Thanks very much.

The next question comes from Alexander Petrk of Societe Generale. Please go ahead.

Yes, good morning and thank you for the opportunity to ask a question. I'm sorry to come back to consolidation. I'd just like you to clearly state to us whether your preferred route to value creation for shareholders is vertical consolidation along the lines of what you're doing with GRS or would you also contemplate a large-size horizontal M&A deal? Is everything on the table, or do you have a preferred route to value creation? That's the first question. Second one is, really, on mobility, nice acceleration there. How should we think about this business developing in the second half? Do you see further scope for improvement in your growth trends there? Thanks a lot.

Yeah, look, I mean, our path to value creation for shareholders is not premised on consolidation and certainly not exclusively right our path to value creation is executing on in the core of the business exactly as we are doing and as I say I couldn't be happier with the progress in the core of the business we've made significant investments that we're executing well on we've collected very significant c-band proceeds this is value creation that we have you know we have executed on and continue to execute on and continuing to then, you know, grow revenues, grow EBITDA. And as we emerge from this, you know, heavy growth investment phase, we'll be into growing and expanding cash flow. So, you know, lots and lots of levers for us to continue to grow shareholder value. And I would say consolidation is, you know, is part of it. But as I've said before, on the DRSGS acquisition, this isn't about consolidation really this is about adding strategic capabilities in a part of the market where we have a very very strong right to win and look on on the acceleration of growth in in networks it's really positive from my standpoint you know the fact that we've you know we've gone to four percent growth both you know in the quarter from quarter to quarter and year on year and is positive. We're on track with our outlook, and I think if we continue to sign the business and implement the business that we signed, we should expect that trend to continue. Thanks. Thanks, Alexander.

The next question comes from the line of Carl Murdoch-Smith of Barenberg. Please go ahead.

Hi. Thank you very much. I just wanted to ask, first, How come CAPEX guidance hasn't changed given the slippage of O3BM Power 7 and 8 in 2023? And then secondly, kind of following up on the question just now, one of the main beats this quarter is obviously fixed data. Can you talk about your confidence going forwards in terms of the sustainability of that growth? Thank you.

Yeah, so I'll take the first question, Alexander. I mean, our capex guidance for the year remains unchanged. Of course, this guidance of 950 million capex is at the exchange rate of 113. So what you can expect is some movements from the forex, basically neutralizing the EBITDA effect that we said earlier. That's number one. Number two, when we give that guidance, we have considered all the costs. And the majority of the cost is basically the cost of the satellites and launches. And those costs do not change, right? So Overall, those costs are remaining at that level, so we don't expect any meaningful change in that guidance. And guidance for the rest of the period of the next four years after that, it is in the range of €460 million per average, as we have said earlier. And of course, there you can expect some forex effects.

Yeah, and look, I'll take the question on fixed data. Really happy with the progress in fixed data. As we talked about, we closed a number of networks in the quarter as well, and that will contribute going forward. We saw some good performance in cloud during the quarter, and the good news there is a bunch of that is – I've described before that we're co-locating our gateways and our access to the satellite with – key cloud data centers and nodes, and we're starting to see, you know, that benefit come through. So I think it's not just the normal mobile backhaul business and, you know, kind of the rural networks that we continue to deploy. It's also the growing influence of the cloud-first strategy that we have, the partnership that we have with Microsoft, and the good work that we're doing to develop our cloud business. And in terms of will it continue, we certainly have that expectation. I think, as I've said, we've outperformed the market as far as fixed data is concerned, consistently quarter on quarter and year on year, and have expectation that we will continue to do so.

That's great. Thank you.

Thanks, Carl.

The final question comes from the line of Roshan Aranjit of Deutsche Bank.

Great. Morning, everyone. Thanks for the questions. I've got two, and I guess follow-ups mainly. Just on SES17, so that obviously became operational a couple of weeks ago. Can you tell us about any early kind of revenue kind of upside maybe or any discussions around incremental contracts? Because if I remember correctly, the thinking was in terms of government contracts contracts that could typically only come on once the satellite is in service? Or should we think about SES17 being more the kind of mobility maritime contracts aside from the RSAT deal? And sticking with mobility, you seem to be on a weekly basis announcing kind of incremental capacity signed with a number of cruise companies. We have seen Starlink talk about wanting to move into maritime, and I think they do have an offer in. I understand your nice grid with the high flexibility, high throughput, but there seems to be a want from the shipping industry for much more capacity. Do you think that that is a concern, or is there a specific segment for Starlink to address? And is there, I guess, more opportunity for you on the maritime side? Thank you.

Yeah, look, great question. So on 17, yeah, I mean, it's great to have it in service. I think we've seen nothing but good performance. We're really, really happy with the performance that we see in orbit. It's above spec, and that will allow us to deliver you know, at and above our SLA towards our customers and deliver, frankly, more throughput. So that's very, very good news. I think, you know, at the moment, we're in the middle of transitioning our customers across onto SES17, those that we were serving on other assets, and in particular, Talos Inflight, with whom we built a network on third-party assets, and that's now moving across onto SES17, and that will have the effect of dropping our some of our costs to third-party capacity going forward. So that's super positive. And again, the sort of feedback from Thales as we move aircraft across onto SES 17 is very, very positive in terms of the service that they're delivering. So, SES17 is not going to be a huge contributor from a Gov standpoint. We will have some Gov on SES17, but that won't be a significant driver. As you say, the real focus on SES17 right now is around mobility and around fixed data. And as you say, we sort of on a weekly basis, we're signing and announcing deals, and that's what will fuel progress on SES17. In the short term, what we see most focus is cruise, and so not just on our O3B constellation, but also leveraging SES-17 for cruise, so that's stuff that we're working on right now, and growing the aviation business. SES-17 is a great satellite for aviation. Aviation is sort of coming back strongly, I would say, post-COVID, particularly in the US. And so we're optimistic about our prospects for SES17 in mobility and in fixed data where, you know, RSAT's a great example of a deal, but we've also signed networks in Central America. There's a lot of activity in kind of the Andean region. So I think good prospects for SES17 as far as fixed data is concerned. And in cruise, look, I mean, I think we will see and expect to see the sort of quote-unquote hero projects where individual cruise ships are connected and demonstrated and so on. But cruise, you made the point about more capacity. More capacity in cruise is great news for us because we're the only ones that can deliver this sort of high-throughput, high-performance connectivity. Cruise ships are sort of floating ships. or towns or however you want to think about it with very high GDP. And what you need to do is serve them with gigabits worth capability and that's something that is very very hard to do when those ships are moving and when multiple ships are all in the same region at the same time and we've got a network which is configured uniquely for cruise and with the latest brands we've added I think we now you know it might be one of the top six brands that we don't have pretty much all of the premium cruise ships that from all of those brands on our network, which I think shows the quality of the offering that we have and the competitiveness of the offering that we have, even though we're by far not the cheapest solution on the market. I think what we rely on is the kind of service quality that we can deliver and sort of the guest experience and guest satisfaction that we deliver on board cruise ships. So all good as far as the cruise industry and the cruise market is concerned, and we expect further growth from that market. I think to some degree on SES 17 and then obviously also with the arrival of O3B and Power.

Okay, that's helpful. Thank you.

Great. I think we're done.

Are we done, Richard? I think you said that was the last question, so maybe hand it to Steve to conclude.

Yeah, look. Nothing much more to add other than a lot of work going on in the business. Happy with the first half. Very focused on delivering a similarly positive second half to the year and obviously delivering on the significant amount of projects that we have in the business. More green ticks to come when we speak next following Q3. So with that, thank you very much for joining. Much appreciated and talk to you next time.

Thank you.

Thank you for joining today's call. You may now disconnect.