SES GLOBAL Reports Strong Third Quarter Results (updated for erratum)

SES GLOBAL, the pre-eminent satellite operator worldwide (Euronext Paris and Luxembourg Stock Exchanges: SESG), issues its financial results for the third quarter of 2005.

Highlights

• Revenues:
  • Q3 revenues up 21% to EUR 313 m (Q3 2004: EUR 259 m)
  • Year-to-date revenues rise 13% to EUR 922 m (YTD 2004: EUR 815 m)
  • Year to date recurring same scope revenues up 12.5% on prior period


• EBITDA:


• Q3 EBITDA increased 10% to EUR 216 m (Q3 2004: EUR 196 m)
• Year-to-date EBITDA of EUR 654 m (YTD 2004: EUR 604 m)


• Net profit:
  • Q3 net profit rose 48% to EUR 108 m (Q3 2004: EUR 73 m).
  • Year-to-date net profit of EUR 277 m (YTD 2004 - including an exceptional tax credit of EUR 60 m - EUR 293 m)
  
  
• Net debt rose to EUR 1,979 m from EUR 1,716 m at June 30th reflecting progress made improving the efficiency of the capital structure of the Group.
  
• Share buyback and cancellation programme 72% complete as at October 31st 2005.
  
• Several new contracts signed for transponder capacity for High-Definition and Standard Definition video, as well as for managed services.
  


• Utilisation rates stood at 86.7% at SES ASTRA and 73.0% at SES AMERICOM
  

Romain Bausch, President & CEO of SES GLOBAL, commented:

"SES has continued to make active progress during the quarter, building on the success of the first six months of 2005. In addition to the new transponder contracts signed with video broadcasting customers, we have also introduced new service platforms for video services such as blucom and IP-Prime. These will generate new, profitable revenue streams alongside that of our core satellite infrastructure business.

We expect to consolidate our leading position in the satellite operating sector via the development of new opportunities, the delivery of growth, and the creation of shareholder value."

1. BUSINESS REVIEW

During the third quarter, SES continued to see strong demand for its services in its key markets. Revenues grew 21% against the prior year period to EUR 313 million, with no material non-recurring items in either period.

On a year-to-date basis revenues are EUR 922 million, an increase of 13% over the corresponding prior year level, with recurring, same scope, constant exchange rate revenues 12.5% ahead of 2004 levels.

SES ASTRA concluded several significant contracts with customers for additional capacity. These included a three transponder deal with BSkyB for High Definition TV transmissions, and one transponder each with the BBC and Globecast, all for the buoyant UK and Irish markets. SES ASTRA won a new transponder contract with Polish broadcaster TVP for digital broadcasts into Poland, which, together with UPC’s expansion, allows SES ASTRA to strengthen its position in the important emerging markets of Central and Eastern Europe. Finally, in September SES ASTRA renewed contracts for four transponders with BSkyB.

Meanwhile, SES AMERICOM joined forces with Comcast Media Center in a Joint Marketing Alliance to support delivery of advanced services offerings via cable in the US. In September, SES AMERICOM launched IP-PRIME, a platform to support the delivery of IP television via satellite to the edge of terrestrial telecommunications networks in the US. Other contract wins in the period include those with Deutsche Welle to deliver programming in German to audiences across the US, as well as Discovery Communications, Jones Radio, and Satellite Lynx.

These new contracts helped maintain high utilisation rates at both SES ASTRA and SES AMERICOM. SES AMERICOM’s utilisation rate stood at 73% (337 of 463 commercially available transponders), calculated on the equivalent transponder basis now used across the Group. Calculated on the previous system the utilisation was 79%. The commercially available transponders included 24 C-band transponders on AMC-9 at 83° West which became available towards the end of the quarter. At SES ASTRA utilisation rose to 86.7% (175 of 202 commercially available transponders). We will from now on report utilisation per business segment. Europe, Middle East, Africa (EMEA) which comprises all ASTRA, NSAB and African capacity had a utilisation rate of 75.8% (212 of 280 commercially available transponders). This reflects a combined SES ASTRA/NSAB utilisation at 85.8% (205 of 239 commercially available transponders) and an African market utilisation of 17.6% (7 of 41 commercially available transponders). The 7 African transponders include customers such as Sky Vision, Accelon and AMERICOM Enterprise Services. The Americas segment consisted of only SES AMERICOM in the period, and will in future include QuetzSat and Ciel satellite capacity.

High Definition Television programming remains an important engine of growth. In Europe, the market is developing strongly with contracts signed with HD1, ProSiebenSat.1, Premiere and BSkyB. ProSiebenSat.1 inaugurated its HD programming with the launch of two channels on 27 October. Premiere has scheduled the launch of its HD bouquet on ASTRA for the beginning of December. In the New Year, BSkyB will inaugurate its HD offering on ASTRA. Others have similarly flagged their intentions, underscoring ASTRA’s position as the satellite platform of choice to reach key European audiences.

In early September, SES ASTRA unveiled blucom, a BlueTooth-enabled interactivity system which uses consumers’ mobile telephones to deliver interactive TV services via the satellite set-top box. The launch at IFA in Berlin attracted substantial interest from broadcast customers, and market trials have already begun in Germany with two initial customers signed.

The recently acquired services businesses (Astra Platform Services and Verestar) also added revenues, with proportionally higher cost of sales, hence the growth in group EBITDA was lower than the growth in group revenues, at 10%.

Net interest charges in Q3 were more than offset by gains recognised on financial instruments, resulting in net financing income in the period of EUR 21 million, compared to a net charge for the same quarter of 2004 of EUR 8 million.

After a tax charge of EUR 35 million, representing 24.6% of reported profit before tax for the period, Q3 net income rose almost 48% compared to the prior year level. For the first three quarters of 2005, the net profit of EUR 277 million is EUR 16 million, or 5%, below the figure achieved in 2004, although this included a tax credit of EUR 60 million arising from a reorganisation of the Group’s legal structure.

In September, GE Capital disposed of part of its interest in SES GLOBAL, placing the 33 million shares which had been held in a voting trust with a variety of international investment institutions. SES GLOBAL’s free float was thus increased to 46%.

In September 2005, SES GLOBAL joined the CAC Next20 and IT20 indices. These admissions recognise the improved liquidity and market capitalisation of the Group. As liquidity, free float and market capitalisation continue to improve, we expect to see additional advances into key market indices.

As at the end of October, the Group had bought back 46.7 million shares for a consideration of EUR 480.3 million in the execution of its share buyback and cancellation programme. An Extraordinary General Meeting is to be convened later this year to approve the cancellation of these shares as part of the Group’s commitment to delivering value to shareholders.

Outlook

In December, the AMC-23 satellite will be launched on a Proton rocket from the Baikonur Cosmodrome. This satellite will serve the Pacific Ocean region with a Ku-band payload dedicated to mobile broadband services. Connexion by Boeing has contracted the majority of this capacity and service will commence in Q1 2006. The C-band payload on the satellite will serve intercontinental traffic between the Americas and East Asia/Australasia.

Our modelling guidance remains unchanged, with the exception of minor timing differences in satellite launches, which affects the capital expenditure schedule as previously published. The ASTRA 1KR satellite, originally due to launch in the fourth quarter of 2005, is now due to be launched in the second quarter of 2006. This change has no operational or commercial impact, being replacement capacity for the co-located satellites at the 19.2° East orbital position. The revised capital expenditure schedule is incorporated in the presentation materials associated with this announcement, available on our website.

2. SUMMARY FINANCIAL HIGHLIGHTS (in EUR millions)

CONSOLIDATED INCOME STATEMENT *

QUARTERLY DEVELOPMENT

* The above financial information is drawn up using the accounting principles and valuation methodologies established under International Financial Reporting Standards. Full reconciliations of the reported prior year interim and full-year income statements and balance sheets from Luxembourg GAAP to IFRS were, and will be, provided in the Group’s interim and full-year financial statements respectively.

For further information please contact:

Additional information is available on our website www.ses-global.com

• This announcement does not constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, any securities of SES GLOBAL S.A. ("SES GLOBAL") nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.
  


• No representation or warranty, express or implied, is or will be made by SES GLOBAL, or its advisors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this announcement, and any reliance you place on them will be at your sole risk. Without prejudice to the foregoing, none of SES GLOBAL or its advisors accepts any liability whatsoever for any loss howsoever arising, directly or indirectly, from use of this announcement or its contents or otherwise arising in connection therewith.
  


• This announcement includes "forward-looking statements". All statements other than statements of historical fact included in this announcement, including, without limitation, those regarding SES GLOBAL's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to SES GLOBAL's products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of SES GLOBAL or those markets and economies to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding SES GLOBAL's present and future business strategies and the environment in which SES GLOBAL will operate in the future and such assumptions may or may not prove to be correct. These forward-looking statements speak only as at the date of this announcement. Forward-looking statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. SES GLOBAL does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.