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Hello and welcome to the SES Half Year 2024 results. My name is Caroline and I'll be your 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'll have an 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 questions. If you require assistance at any point, please press star 0 and you'll be connected to an operator. I will now hand over the call to your host, Richard Whitening, Head of Investors Relations, to begin today's conference. Thank you.

Good morning, everyone. Thanks for joining this analyst and investor call for the H1 2024 results. The 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 on page two. The agenda for today is outlined on page three. In a moment, Adele Alcelet, our CEO, will present the main business highlights, followed by Sandy Chauvin, CFO, to cover the financials in more detail. After some closing remarks from Adele, we will take your questions. So, with that, let me hand over to Adele.

Perfect. Thank you, Richard. Good morning, everyone. I'm pleased to be reporting a solid first half of execution and important milestones that we have reached. Let's start on page number five. First of all, HF1 revenue and adjusted EBITDA were fully in line with our projections and will remain on course to deliver on all of our financial targets for full year 2024, with adjusted EBITDA tracking to the upper half of the range that we've given. Second, HF1 reflected continuous strong performance in our networks business. We reached that crossover point in 2023 to now account for over 54% of the total revenue of the company. Government was a standout performer and secured impressive wins across both the U.S. and global government business. Air on cruise, including the periodic revenue in first quarter and cruise, also delivered strong growth. Third point, bringing Empower into service in April was a significant milestone for us, and we're now ramping committed customers onto the network. I also got to experience my first SES launch with Astro 1P, taking off in June. This is an important satellite for us. It sustains the long-term cash flows for our immediate business in the neighborhood at 19.2 degrees east, where we serve almost 120 million households. That's over 300 million people. Lastly, and most significantly, our transformational agreement to acquire Intelsat and integration of the two companies will, from expected closing the second half of next year, create a stronger multi-orbit operator. The combined company will be well positioned to compete with competitive end-to-end solutions in valuable growth markets where we have the right to win, underpinned by strong balance sheet fundamentals and sustained cash flow growth to drive value for customers, employees, and shareholders. Moving to our key financials on page six. Revenue of 978 million euros and adjusted EBITDA of 528 million euros were broadly stable year on year. As I mentioned, we delivered a growing performance in the networks. Meanwhile, media performance was consistent with our expectations. We secured important additional signings that underscored the solid fundamentals and cash flow generation of this business going into the future. Executioner and laser focus on efficiency and cost means that adjusted EBITDA is tracking well. We expect full year 2024 to be in the upper half of the target range set in February. Adjusted free cash flow was 70% year-on-year, partially helped by lower run rate and capex than what we had expected. We'll remain within the guidance of 500 to 550 million euros for the full year. Finally, our backlog stood at 3.8 billion euros at the end of June, including some 430 million euros of signings across the business in the first half of the year. Pipeline for the second half of the year looks good, which will keep our backlog healthy. Let's move to page number seven. I wanted to share two important wins in the first half of the year. The first example is a government solution where SEF Station Defense has been awarded a multi-year contract by U.S. Air Force Air Combat Command to support its remote piloted aircraft training and testing program. The contract is totaling 47 million U.S. dollars. The important highlight of this is that this is the third contract iteration for the U.S. Air Force mission, which shows you the long-lasting partnership we have with these customers. We will deliver transmissions, coverage of the U.S. and the Pacific Ocean, as well as network management and monitoring solutions. Second example is a media example, where RTL Deutschland recently extended their long-term partnership with SES at 19.2 degrees east with a new contract worth tens of millions of euros that will run to the end of the decade. in addition to satellite capacity, we will now be providing value-added uplink services for their TV channels, expanding the scope of our relationship with RTL, as well as the contract duration. There are many other examples in government with NASA and the U.S. Army, in mobility with Virgin Voyages and Resort World Cruises, in fixed data with INRED, and in media with QVC and Kiva Monica. Let's move to slide number eight. Moving to the performance of the business units in the first half in more detail. With networks, you can see that the revenue grew 5% year on year. In the networks business, the government, we improved it by 8.4% year on year with high single-digit expansion in both U.S. and global business across the world. Mobility was at 11.1% year on year growth. That included double-digit growth in maritime from the periodic revenue we booked in Q1, and new cruise ships that were added to our service portfolio, as well as single high-digit growth in aviation for new contracts signed to support IFC partners. In fixed data, the comparison to last year is impacted by the periodic revenue we recognized in first quarter 2023, which accounted for two-thirds of the variance. Excluding this item, the business was down by low single-digit percentage, as lower revenue from Europe and Asia was largely offset by growth in Latin America. Network's backlog stood at 1.9 billion euros, with some 310 million euros of signings in the first half of the year. As I highlighted already, the entry of Empower into commercial service was a key milestone for SES, with committed customers now being deployed. We'll remain on track to expand the initial constellation of MPAR starting with the next launch of Satellites 7 and 8 at the end of this year. Followed in 2025 with Satellite 9 and 11, 9, 10, and 11, I should say, and in 2026 with Satellites 12 and 13. With that, increasing the capacity of the network and accelerating our profitable long-term growth trajectory. Turning to page number nine, notwithstanding the headwinds we're facing on the top line, the fundamentals of our immediate business remain robust and supportive of solid cash generation for business which delivers high-quality content to worldwide audience of 363 million households. Ladies and gentlemen, that's over 1 billion people. The DUS business, including our popular HD1 consumer platform, is our most valuable business within media, generating over 300 million euros of annual revenue as used by the public and free-to-air broadcasters, as well as some 18 million direct-to-home households. SES value proposition in this segment was evident in the stable revenue performance in the first half of the year and improved trajectory over previous years. The rest of Europe is our second largest unit, also generating over 300 million euros per year, delivered to our expectations with an expected mid-single-digit decline year over year. Meanwhile, we continue to focus on managing the structural headwinds across other markets, especially in the mature markets in North America and Asia. Our sports and events business continues to be a standout performer with double-digit revenue growth and an ever-expanding list of T01 global customers, like NFL, Premier League, and, of course, Olympics. Turning to SCS to leverage our existing global reach and expertise in content management, aggregation, and distribution. SOMP successfully launched in June, as I said earlier, bringing the latest technology to replace capacity at the most valuable video neighborhood at 19.2 degrees East. We will be replacing four satellites with one. Astro 1Q will follow later and will provide redundancy and bring the ability to grow by expanding our network business further and new. Let me close out this section on page number 10. with our important and transformational agreement to acquire Intelsat for an equity consideration of $3.1 billion. Since announcing the deal at the end of April, the regulatory process of obtaining all necessary clearances is well underway, and we remain fully on track to closing the acquisition during the second half of the year. At the same time, the two companies are making strong progress in terms of detailed integration planning, while respecting all legal and regulatory requirements as the two businesses continue to operate fully independently. I believe most of you have seen the financial information that Intelsat has published on the website. They're continuing to execute well against their full-year revenue and adjusted EBITDA targets and supporting their own strong balance sheet. The transaction is now fully financed after a successful syndication of 3 billion euros compromising of 2.1 billion euro bridge facility and 1 billion U.S. dollars term loan, providing us with financial flexibility to get leverage over time. Also importantly, and as expected, both Moody's and Fitch confirmed SES's investment-grade rating after the transaction was announced. This acquisition is significant in four key areas. First, it is highly equity. We have a clear line of sight to achieve 370 million euros of combined OPEX and COPEX synergies. And through the integration planning work that I mentioned, we're building robust execution plans that we will be implementing starting on day one of close. This will ensure that we can deliver 70% of the total synergies by no later than the end of year three. At the same time, We'll continue to explore opportunities we believe are there to capture additional synergies. Second, the combination of our complementary satellite fleets, ground networks, spectrum portfolios, and capabilities will create a stronger multi-orbit competitor capable of providing greater service options and resilience. Third, 60% of the combined revenue is generated from valuable growth segments where the benefits of a multi-orbit architecture are best placed to serve sophisticated requirements for reliable high throughput and low latency connectivity. Lastly, the acquisition accelerates profitable growth and cash generation. Sandeep will cover this in more detail shortly. But we expect that with a growth in the combined business and synergy execution, the combined company will be generating more than 1 billion euros of free cash flow by 2027-2028 timeframe, i.e. within two to three years of closing. With this ramp-up, we achieve rapid deleveraging with net leverage reducing to below three times within 12 to 18 months of closing. With this profile, we will build potential for increased level of shareholder return in the future through our progressive dividend and or additional share buybacks. And of course, we simultaneously enhance financial flexibility to invest profitably in network and service innovations, as well as applications of the future to ensure that SEX remains competitive in the fast-moving and dynamic SATCOM industry. With that, I will turn it over to Sandeep to go through the financial in more detail.

Thanks, Adele. Good morning, everyone. We are very happy with our solid first half of financial performance. This demonstrates our competitive value proposition, strong execution across the business, cost discipline, solid cash conversion, a strong balance sheet, and commitment to shareholder returns. Starting with the income statement on page 12. revenue of 970 million euros was broadly stable compared to first half of last year at the constant products rate adjusted a bit of 525 million euros it was lowered by about one percent or five million euros compared to the prior period as you can see from the chart on the right the main components of this were the growth in network of 25 million euros or about five percent It included periodic revenue of 22 million euros in quarter one of this year, as we had announced earlier. This was offset by a decline in media of 33 million euros or about 6.7%, while recurring OPEX was slightly favorable year on year and contributed to adjusted EBITDA margin of 54% in first half of this year. Looking at the other elements in the adjusted net profit of 111 million euros, which was also 5 million euros lower compared to first half of last year. Interest earned on more than 2 billion euros of cash. It led to net financing expense being 49 million euros lower and offset the higher expense for depreciation, amortization and tax. The increase in depreciation and amortization arises primarily from a change in accounting where we have elected to create indefinite life intangibles as definite life amortizable intangibles, further improving alignment of our accounting policies with the IFRS standards. Lastly, the difference between adjusted and reported net profit is explained by a net impairment expense of €25 million, which includes a €34 million write-down of a geo-satellite in line with the evolution of our media business in Brazil following the outcome of a customer's bankruptcy process, which I'll speak about in more detail shortly. Additionally, significant special items amounted to an expense of 20 million euros and included also acquisition-related costs. These items were partly offset by net tax benefits of 7 million euros. Turning now to cash flow and the balance sheet, on page 13, adjusted free cash flow of 146 million euros was 61 million euro or about 70 percent higher year on year this included capex of 140 million euros which was about 80 million euro lower than in the prior period however we would expect a higher capex run rate in second half of the this year in line with the 500 to 550 million euro capex outlook that we had given for the full year 2024. Our strong balance sheet has sizable cash balance of over 2 billion euros, which is continuing to earn a healthy interest of 4-5%. And this is yielded about 60 million euros of interest income in cash in first half of this year. We have paid 216 million euros or about 50 euro cents per share of dividend to our shareholders in April. They will now implement the change to semi-annual distribution of dividend with the payment of an interim dividend of 25 Euro cents per share this coming October. On top, we are continuing to buy back shares. Until the end of last week, we had bought back more than 18 million FDRs and expect to complete this program of 150 million Euro share buyback during the coming months. We will also buy back sufficient volume of B shares to maintain the required to each to one voting proportion. Adding the dividend payment during 2024 and the share by BART equates to almost half a billion euro of cash return to shareholders. That's a very attractive heat. On the C-band reimbursement front, we are finally seeing even good acceleration and good progress. To this date, we have received over $1 billion. and we have now received confirmation of further reimbursements during quarter three, amounting to over $200 million. This is very good news. As you would have seen, we have successfully completed the transaction financing of 3 billion euros. It consisted of 2.07 billion euro, which facility commitment as well as $1 billion tumble. Our balance sheet continues to be industry leading with net leverage of 1.7 times at the end of June. And as was already mentioned by Adele, our investment-grade credit status was reiterated by both rating agencies following the announcement of the Intelsat transaction. This reflects rating agencies' view of the compelling logic of this transaction with Intelsat and our commitment to maintaining investment-grade balance sheet metrics with strong cash generation delivering mid single digit growth in adjusted EBITDA with faster growth in cash EBITDA. Normalized capex of between 600 to 650 million Euro and low level of interest and tax. As such, the combined company is expected to generate more than 1 billion Euro of normalized adjusted free cash flow by 2027 to 28 timeframe. including the wrap-up of significant synergies by the third year. This gives us financial flexibility to create value for shareholders through the combination of a strong balance sheet, cash returns, and disciplined profitable investment. You can find more details regarding these financial predictions in the appendix of this presentation. Finally, moving now to the page 14, presented a standalone financial outlook this is fully on track we expect revenues in the range of 1.94 billion to 2 billion euro with the step up from h1 to h2 being driven by ramping customers onto m power while media revenue for the second half should be at least similar level as in first half of this year as mentioned by ada We are tracking well against our adjusted beta target of between 950 million euro to 1 billion euro, and we are confident that we'll end up in the upper half of this range. As mentioned already, capex remains within the range of 500 to 500 million euros. I also want to mention that during quarter two, a bankruptcy court approved the restructuring plans of a CS media customer in Brazil. While SES has secured the revenue for full year 2024 from this customer, it is expected that the outcome of this bankruptcy process will result in lower revenue during 2025, which will be equivalent to approximately 5% of annual media revenue. SES expects to at least offset this impact on adjusted EBITDA starting from 2025 through additional operating efficiency actions as well as commercialization of our group's deal pipelines. Now I will hand back to Adele to conclude.

Thank you, Sandeep. Can we move to slide number 16? And let me just summarize the key takeaways from our first half performance. Driven by our strong competitive offerings in government and mobility, our network business continues to deliver growth and value for our clients. This is complemented by immediate business, with solid fundamentals and execution notably in the most important markets and segments that we serve. Our performance in the first half has put us in good position to deliver full year adjusted EBITDA within the upper half of the range that we've given from February. Our cash flows are growing and our balance sheet is the strongest in the industry. We're returning a meaningful amount of cash to shareholders and thinking hard about when the right time is to expand this. Finally, we're taking the right steps to strengthen our multi-orbit offerings and competitive position for the long term with the agreement to acquire Intelsat, where the combined company will be the stronger and more capable than would be possible for either company on a standalone basis. I want to conclude on page number 17 with a brief overview of our evolved strategy and what to expect from SCS going forward. First, I'm a firm believer that our target segments and use cases, there is no single orbit capable of meeting all of our customers' growing demand for reliable, high performance, low latency connectivity. Therefore, multi-orbit will become essential. But it should not create complexity for our customers. We are investing in and perfecting a strong, intelligent multi-orbit network capability that forms the backbone of our vertical solutions. But those solutions will remove complexity at the customer level. Customer centricity for us means we focus on our customers' requirements holistically, not partially. This gives SES a compelling right to win. Implicit in that is our discipline and focus on the right kinds of customers and the right kinds of solutions. We want to compete where our differentiation resonates. enabling us to win. Second, to build that competitive differentiation, we are continuously investing in innovation that can supercharge our core capabilities. Innovation in our space and ground network, innovation in our digital layer, innovation in our operational service delivery. These are our capability engines that will drive all our vertical solutions. These three key strategic priorities will sustain and enhance our position as a trusted, attractive partner to help drive our customer success. In turn, this will drive growth in our revenue, EBITDA, and free cash flow. Third, we are rebuilding SES to focus on execution. This means getting leaner, more agile, and more efficient across all aspects of the organization and processes. This initiative is well underway, and we are already seeing the benefits of that. Of course, all of this is amplified by the highly accretive and compelling benefits of bringing together our businesses with Intelsat. With that, we're happy to take your questions.

Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. We will take the first question from line Nick Denzer from Marcus, the line is open now. Please go ahead.

Yeah, good morning, guys. Three questions. So first of all, just regarding the impact from that Brazil customer in 2025, when you're talking about mitigating that, is that all about cost savings or are you able to find other ways to fill some of that capacity and recapture some of that lost revenue? Second question. I guess the key factor in free cash flow this year is the level of cash repayments you'll receive related to those CBAN costs incurred. I can see that you said $420 million still to come, and I think you've received none in the first half. So can you give a rough idea of how much you might expect to land in the second half in 24 and the sort of timeframes on that? And just on the financing you have put in place related to the Intelsat deal, So you talked about a 2.1 billion euro bridge facility and also the $1 billion five-year term loan. Can you give us an idea of the cost of those two different facilities and also whether they are unsecured or whether there is additional security or guarantees for those loans compared to the bonds?

Okay, very good. Well, let me start answering and then, of course, indeed, we'll dive into the second two questions. So, first of all, impact of the Brazilian customer and how do we mitigate it? Planned refocus is to mitigate it through cost. Something we can take to the bank, something we can secure. It's something we control very well. Of course, in addition to that, we will drive incremental revenue activities in order to secure additional growth and additional revenue. But we will make sure that We have it covered first with cost, and then revenue would be, hopefully, an additional mitigator if we need it in that particular situation. I'm going to let Sandeep answer the two other questions.

Yeah. So, regarding your question on the free cash flow from the C Bank, we are making really good progress. Of course, there have been large delays in getting these reimbursements, but when we stand today, we are in a good position. I might like to recall that on this we have spent close to $1.5 billion, out of which $1.4 billion is reimbursable. At the end of June, we had received already above $1 billion, which is in our pocket. And during the past few weeks, actually, we received confirmation from the clearinghouse that additional amount of more than $200 million should be in the mailbox. So during quarter three, we would expect to receive it. So that leaves us another $200 million to be realized further. As of now, we would expect this to be coming during the subsequent quarters of this year, as well as during 2025. So we are continuing to engage in those conversations with the clearinghouse to make as expeditious reimbursement as possible. Regarding your question on financing, This is a very good outcome. We had a very good outcome on this bridge financing. This did us from closing this transaction. Three million euro financing fully secured. I want to say that this entire financing is fully unsecured. At SEIS balance sheet, we do not have any debt whatsoever, which is secured. So this is a totally unsecured facility. So 2.1 billion Euro is a bridge facility that we will continue to finance in the market with the market takeout financing during the coming quarters as we go towards the closing date. And the 1 billion term loan, it is with several banks and this will be amortized over five years. So this is a dollar loan, it is at very competitive rates. And it remains within the total financing cost range that we have given, which is $325 to $350 million range for the combined company.

I think that's really important to note, right, so people can model it correctly. That is the range we expect to be in, and we're quite confident we'll be in that range.

Okay, thanks.

We will take the next question from line Karl Marduk-Smith from Bamberg. The line is open now. Please go ahead.

Thank you very much for the questions. Three from me as well, please. Firstly, you seem to have interchangeably used the phrase video or media quite a lot during the presentation. I was just wanting clarification. Do you mean the same thing when you say video or media, specifically with regarding to your comments around the impact of the Brazilian customers bankruptcy next year being a kind of 5% headwind to media revenue? Just confirming you also mean video revenues. And secondly, also in relation to video, you talk about double-digit growth in sports and events. I was just wondering if you could kind of disentangle how much of that is underlying versus related to specific events. I'm just thinking in terms of, you know, it felt like I've gone home every night and watched sport for the last few months, certainly. So I was wondering how much of it is in relation to kind of current events and obviously also thinking forwards. Ahead to Q3, given the Olympics going on, et cetera. So comments on underlying versus specific there. And then thirdly, on depreciation and amortization, you've seen higher DNA this quarter, saying it's arising mainly from a change in accounting treatments of orbital slot license rights. Can you just expand a bit more on that change and what we should be expecting going forward? Thank you.

Okay, great. Thank you. Thank you for the question. The first one is quite easy. Yes, when we say video and media, it's the same thing. So I apologize if we confuse you guys by changing using different words. We'll try to stay consistent going forward, but it is exactly the same. Sports and events, it's a really, really exciting platform for us. Like what we've done there is we've built a compelling service and a platform, a technology platform that enables events in general to be able to come on the platform very quickly and do very efficient distribution of that across the world. And although it is actually, you're absolutely right, it is driven by events, the good news is there are a significant number of events that are all seasonal in nature across the world. So, the events today, of course, are driven by what's happened with Olympics. It happens every four years. But in the second half of the year, there are the Asian Cups, there are different Asian competitions. In the beginning of next year, NFL Super Bowl comes back again, etc., which we were part of, and so on. You know, other events, I don't want to mention some of the customers that are protective a little bit, are year-long events and etc. So what's good to see is Despite the fact that we are dependent on these events, the business has delivered consistent double-digit growth for the last eight quarters. And actually, we have an ambition to make that business significantly larger than what it is today because it's really getting traction. So you can't say it's underlying, but the nature of the business, because it's driven by events, it becomes underlying because the events change every quarter. There are different events that we have been able to win. So, hopefully, that clarifies it and clarifies why we're excited about that part of the media business. On the DNA, please.

So, amortization and depreciation, this is what I already explained earlier. This basically pertains to certain orbital slot flights. As you know that on our balance sheet, we have intangible assets. And this primarily now consists of orbital slot rights. And these, as per the prior policy, they were not being amortized over years. And we have taken a reassessment of that entire position. And based on that, we are starting to amortize those orbital slot rights. And that reflects this impact that we show here on slide 12. which represents about 29 million, which is primarily coming from that position of orbital slot rights being changed from non-depreciable to depreciable slot rights.

That's great. Thank you very much.

Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the next question from line Sami Kassab from BNP Paribas. The line is open now. Please go ahead.

Thank you very much, and good morning, everyone. I have a few questions, please. The first one on SCS Video. You were previously talking about flattening the curve in video, and yet the Q2 performance of SCS Video is one of the worst reported in close to five years. So can you help us understand what drove the acceleration and the decline in Q2, and how should we think about SCS Video revenue trends in 2025 Shall we now expect double-digit declines given Brazil? And on the back of what you just said, Ariel, can you quantify the sports and events revenue size, please? And then secondly, on networks, you want quite a few contracts with government, reported double-digit revenue growth in the quarter. Can you maintain this rate of growth for the remainder of the year in government? Thank you.

Very good questions. Thank you for that. Look, on video, clearly, we have been always guiding that we will see this business at about mid-single-digit decline on medium-term and long-term. Clearly, in the first half of the year, we've seen some headwinds, specifically around this customer that we have described, right, which impacted our overall revenue, which is why it's important to look, and while we're disclosing You know, how is the business doing in your key regions? And our key regions where majority of our revenue were over 600 million euros annually being generated is between DAF and Europe, the rest of Europe. And those businesses, DAF was even stable year on year. So flat, if you will, and Europe was exactly where we thought the business would be, which is middle single-digit decline, around minus 5%, as we had expected. So the business was dragged down by this situation in Brazil. Now, if you think the question about how do you think about it next year, we're still quite confident about the prospects of the business and the ranges that we keep talking about. Clearly, next year, we will have headwinds, right? Because 5% of the business disappears, even though we had a long-term contract with that customer, which is why we're focused to make sure we mitigate that with our cost activities, which we are very confident that we will do, right? So the question will be, can we mitigate it with revenue activities, right, to stabilize the revenue further? And that's something we will lean hard on our sports and events team, right? We want them to you know, go beyond the double-digit growth. We actually want them to grow much, much faster, and we'll see what we can do. But on a midterm basis, knowing that 2025 is going to be impacted by this 5% impact of a client should remain the same, the same as we've had it before, exactly because the biggest business within that industry organization within that business overall continues to be exactly what we expect it to be. So that's on that. Now, unfortunately, we're not ready to disclose Fortune event exact number, but we will do it in the next quarterly releases because what we would like to do is actually not only release what we have today, but be a lot stronger in our conviction of the future. and where we want to take this business, rather than just give you some numbers at this point. By the way, the numbers are floating within our financials somewhere, Richard, and I don't know if it's there or if it's not, et cetera. But a lot more on that in the future. On the networks, look, the dynamics that you see, which is a high single-vision government growth, and I think the arrow and the quick business performance, better than our expectations, honestly. The dynamics going forward is as follows. We expect our government business to continue to deliver mid to high single-digit revenue growth. We think it's absolutely sustainable. There'll be some important wins we'll be announcing. Unfortunately, we couldn't get it done in close for this quarter announcement, but we'll be announcing, I'm sure, in the third quarter that further demonstrates the traction in that business. And it's driven by the fact that both the U.S. government as well as European government and other global governments, international governments, see satellites as a key component for their strategy, both in military use as well as non-military use. So we see the demand, whether it is, you know, as I said, in military missions or in, you know, social connectivity and digital initiatives that they have across the countries is very strong. And the governments are not looking for one solution. They're looking for multiple orbits and with our unique NEO capability and geo combination and partnerships in NEO, we see that demand to continue to be strong. We also see our cruise business, If you, you know, normalize for the periodic revenue we got in first quarter, because due to one single contract, we'll continue to be strong. And we see that evolving by looking at how are we doing in terms of new ships winning, right? That's an important key indicator for us as we look in the future of the business. And we're quite, we're happy where that our team has taken us and going in. And our IFC business, there is massive demand. Today, a lot of our business in that segment is to our partners, we're getting pulled into a lot more airlines asking us to build to bid direct. In some cases, we include the partners in some cases, they really want us to be bidding direct. So we see the momentum and the opportunity of new airlines turning on connectivity in their airplanes to be very robust going forward. So you should expect the overall network business momentum to be exactly how you see it today. That's what we're expecting. That's what we're driving, and that's where we're putting a lot of our investments to ensure we have the solutions that are very competitive. I hope I answered your questions. Perfect. Thank you very much.

Thank you. We will take the next question from Line Alexander. Peter from Bernstein. The line is open now. Please go ahead.

Good morning, and thank you for taking my questions. I just have two. The first one pertains to the phasing of the headwind you're going to have from this Brazilian operator's lower revenue. It seems to me that we're shifting from minus 5, which is the second decline for your video business, to minus 10 during the time when you have this base effect of this Brazilian customer. So is this kicking in as of the second quarter and then continues for the next 12 months, or is it a different phase? I'd just like to understand where exactly we should model this kind of trend in video. And against that backdrop, can you just confirm that you'll still be in a position to report like-for-like growth in 2025 overall with the growth in networks offsetting entirely that video decline? And then the second question, if you could detail the reasons behind the 15% decline in the second quarter in fixed data, like for like. What exactly caused this drop and will this reverse in the second half as you have more capacity coming on stream with Empower? Thank you.

I'm sorry, repeat the last part, just the last part of the like for like question. We didn't get it. What exactly was the question?

is the data was down 15%, one five in the second quarter. And I just like to understand what exactly happened there. And if that's going to reverse the second half. Thank you.

Yeah, so on your first question concerning media, as we explained the impact of this customer in Latin America, In quarter two, we had a negative impact coming from that. If you exclude that impact, it's basically in the same range that we had got it for, which is the mixed single-digit decline. However, this customer and this particular restructuring doesn't impact the overall revenue for the full year, right? So, this adjustment, it reflects for the cumulative position of the year, where it had a negative impact, but with the with the recognition that we will have in the rest of 2024, it does not make any impact. So we would expect media to be in line with the outlook that we had provided at the beginning of this year. That means next signal decline for 2024. As we move in 2025, we will see about Another 5% impact on media. This will be only in 2025 on top of the next single digit that we guide for the mid-term outlook, and that remains the same trajectory going forward. Speaking about fixed data, fixed data in quarter two, it was a difficult quarter for our fixed data business. We had some difficult revenues in Europe. as well as we had explained earlier as well, some one-off revenues in prior years. And as we move into quarter three, we would expect some uplift. In quarter two, as we entered quarter two, we have also prioritized some other verticals like government and mobility, much more on the empower as we go into second half of the year, we would expect further ramp up in our fixed data business. But this remains really a challenge part of our business and as well explained, we would expect a step up in this business.

Yeah, so the fixed data, I'm not sure how like for like was minus 15%. Actually, the like for like for fixed data would have been a lower decline versus reported because we have this periodic revenue in first quarter of 2023, right? So it's not the minus 15% would not be accurate and Richard can follow up on exactly what it is.

Just if I expand on that, 15% is the number for quarter two. I think we should take a look at the number for the first half of this year, where it was minus 8%. normalize this one-off that was in first half of last year, and then actually it's a very low single-digit growth there by 2%.

And part of the dynamic there, look, it's a good question, because that is a segment that we are looking very, very hard at, and we've become a little bit more selective of kind of the kind of customers we go after, where do we put our capacity, you know, avoid the very large commoditized segments within that fixed data, right? So, we had selected already in the first half of the year, our leadership had selected not to pursue certain things. Partially, we're in a unique position where our capacity is quite highly demanded. So, we are very picky where do we deploy that solution or capacity versus going after quiet, you know, commoditized or highly price-sensitive segments. As I described in our strategy evolution, you know, we are focused on areas where we can differentiate. And there are plenty of areas in fixed data to differentiate. The sell cycles are longer, but the long-term trajectory of those are much better for us as we go forward. And when you question on how should we think about 2025, this is not a 2025 forecast call, right? But as I said in the beginning, first of all, The impact of the Brazilian customer we fully expect to mitigate on bottom line, which is really important as point number one. We will also work very hard to mitigate the revenue impact. So as overall company, we will work very hard to make sure that our overall performance continues to be stable or slight growth and not accept. the fact that we have a customer impact that will then drop to the bottom line or to the top line of the company. I want to make sure you don't model us incorrectly going forward, assuming that this thing is going to just drop and we are unable to mitigate.

Okay, thank you. So just to clarify, you're saying video will have the full impact next year, minus five, on top of the minus five second decline, that's minus 10%? So networks need to grow by 10% for you to be flat in 2025. Is that the way we're looking at it, just dramatically?

Yeah. There are a couple of things. Broadly, directionally, you're correct. However, there are several levers we also have in media to mitigate some of that revenue decline. So it doesn't have to be, you know, minus 5 and minus 5 equals 10. How much of it we will disclose as we get into 2025, right? Because there are a lot of things we're doing in the second half of the year especially the new contract, new things, sports and events, big contributor as well, right, for media. We're also rolling out multiple free-to-air neighborhoods in addition to what we currently have in our business. So, there are multiple activities in the media business that, you know, should be able to help us in 2025. But we will quantify all of that in due course, right? But I wouldn't see it as minus 5 and minus 5 equals minus 10.

Very clear. Thank you very much.

Thank you. We'll take our last question from Line Roshan Ranjit from Deutsche Bank. The line is open now. Please go ahead.

Oh, great. Good morning, everyone. Thank you for the questions. I've got two, please. Firstly, on the government business, which, as you highlighted, has done well in the first half of the year. We've seen a few of the announcements, particularly, I guess, yesterday around the geo business and having signed contracts with the U.S. government on geo HTS. So my question is, and I know you don't disclose the MPower backlog, but you previously talked about the second half of the year being dominated by filling the backlog with government contracts, having previously focused on mobility. Can you give us a sense of how that has been trending? You said that you expect government to be strong in the second half of the year. I guess that will be driven by Empower, but how many contracts have you signed, I guess, so far, and how many do you expect to sign for the rest of the year? And lastly, just a quick one, the Starlink partnership, any comment you could give us on how that is progressing and any kind of revenue contribution as part of the partnership agreement that you have? Thank you.

Thank you. Look, on the government business, look, the attractive part of the government business is they are quite diverse in their requirements. So, you've seen the latest announcement that we put out earlier today, I believe, or yesterday around Air Force. It was geo... by the way, it's the third iteration of that contract, and, you know, the customer has an option to go to MEO and even to LEO, but continue to choose a geo solution that's really fit for purpose for what they do, for that particular thing. Empower is seeing a very strong demand from the governments, and we are, you know, we're, I was going to say fortunate, but really it's an unfortunate situation where we have to prioritize customers that go in Empower. And a lot of the prioritization goes to the government. So, yes, you're absolutely right. In the second half of the year, you will see big ramps going by the government customers into Empower. And we're hoping to announce a contract this call, but we will be announcing several contracts over the next several months. that will underpin what I'm saying, right? So, you will see that momentum going forward. And the good news for us is, as I described in my opening remarks, you know, we've got two satellites in power going up. That helps us with the capacity. Remember, we're operating the constellation at the impaired level, right, because of the power module failures. That has been very stable for us, by the way. Therefore, as we launch seven and eight, that gives us more resilience, gives us a little bit more confidence and pushing more power through these satellites versus being conservative, which gives us more capacity. Then we'll add it more with nine and 10 and 11 going in 2025 or in first half 2025. that gives us more capacity within a complete set of satellites through 13 in first half of 2026. So the ramp of that end power constellation will continue to really progress well, right, for us. And, you know, we just look forward to making sure that our constraint now opens up a little bit so we can bring more customers into this exciting space. really powerful solution with all the flexibility and the low latency that Constellation provides. The starting partnership is going well. I mean, we're working with them very closely in cruise. We will not disclose financial details. We don't have an agreement with them to be able to disclose it. But if you look at our cruise customers, they're really asking for that flexibility. They want to have dual source on the ship. that's able to leverage whatever capacity available, both for ship operation, but also for their customer experience. And, you know, you can go on some of these large cruise lines websites and see the type of digital experience they're offering their customers. It's really innovative. It's amazing what they're trying to do, right, both on the ship, but also on shore, when they actually get customers, you know, going into tours and different events, et cetera, that uses both capacities and Constellation effectively to deliver the type of experience that they need. So that partnership is going very well with us. And, of course, we're thinking about expanding broader LEO partnerships because we are a big believer in this multi-orbit where we are the, you know, have the owner economics between GEO and the NEOs, which are very important to us, and, of course, a partnership for LEO solution that provides the customers what they need.

That's great. Thank you. If I may just push further a bit more on this, darling. What percentage of your ship base have both solutions on them at the moment, please?

Look, a lot of their ships have an implemented dual solution, right? I don't know the exact percentage, but it's growing, right? But it's interesting to see as it grows, the percentages of the dual sources on the ship. Our revenue continues to grow, and our margin continues to grow. So, that explains the dynamics, right, which is, you know, there is insatiable appetite for bandwidth, for broadband on these ships, and one solution doesn't fix it, right? So, they need both solutions in order to be able to provide that continuous resilient bandwidth. So the penetration of dual source on the ships is growing. I honestly don't know the answer, you know, what percentage of our cruise ships that we serve have dual solution, but it's growing and it's growing fast and we expect it to continue while our revenue and our profit in our cruise business also continues to grow quite fast. That tells you the dynamics, right, that it's not replacement kind of dynamic. It is complementary and both carriers are getting the volumes that they require.

Understood. Thank you.

Thank you. We have came to an end of the question and answer session. I'll hand it back over to your host for closing remarks.

Thanks, everyone. That concludes this morning's presentation. As always, myself and the rest of the team are available if you have any follow-ups. Have a great day and enjoy the summer. Thank you. Thanks, everyone.

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