Half Year 2026 SES SA Earnings Call Transcript
Key Points
- SES SA (SGBAF) reiterated its full-year 2026 financial outlook, expecting stable revenue and adjusted EBITDA year on year, supported by a stronger second-half revenue profile.
- The FCC's report and order for the upper C-band clearance provides a clear path to deleveraging, with total incentive payments of USD6.3 billion, of which approximately USD5.6 billion is allocated to SES SA (SGBAF).
- The IRIS2 program, Europe's secure sovereign constellation, is in final stages of Rendez-vous 1 negotiations, with targeted operations starting in 2030, positioning SES SA (SGBAF) as a cornerstone of Europe's secure connectivity ecosystem.
- SES SA (SGBAF) secured EUR1.2 billion of renewals and new customer contracts in H1 2026, including key wins like the US Space Force PTSG contract and the US Space SST BPA, which will drive incremental revenue in H2.
- The company is making excellent progress on synergy delivery, achieving a 16% reduction in staff costs and a 9% reduction in total operating expenses year on year, with further results expected in H2.
- SES SA (SGBAF) is advancing its meoSphere program, with the first production of printed circuit boards for its onboard processor unit underway, and Pathfinder 2 payload production expected to commence in mid-September, strengthening its vertical integration strategy.
- The company's debt profile is strong, with a weighted average cost of around 4.2%, approximately 72% of debt at fixed interest rates, and an average maturity of roughly five years, providing protection against market volatility.
- SES SA (SGBAF) secured several long-term Media contract renewals, including ARD through 2039, DISH TV, and Sky Mexico, reinforcing the enduring value of satellite distribution and providing long-term revenue visibility.
- SES SA (SGBAF) reported a softer-than-expected Q2 performance, driven by the timing of a couple of contract awards, particularly in Government and Defense and Aviation, which impacted overall H1 results.
- On a like-for-like basis, H1 2026 revenue was down 5% year on year, and adjusted EBITDA was down 6.2%, reflecting ongoing structural declines in Media and Fixed Data.
- The Fixed Data business continues to face challenging market conditions, with like-for-like revenues declining 16.6% year on year, and no significant change in trends is anticipated in the near term.
- The company's net leverage ratio increased to 4.4 times from 4.1 times in the previous quarter, reflecting timing effects of cash flows and lower 12-month trailing adjusted EBITDA.
- Adjusted free cash flow for H1 2026 was negative EUR130 million, reflecting the timing of capital expenditures primarily related to mPOWER satellites and timing of collections.
- The US government business continues to face headwinds from DOGE-related reductions, which have impacted year-on-year performance in the first half of 2026.
- Aviation experienced timing differences between the onboarding and decommissioning of airline customers, as well as lower ESA kit shipments in Q2, which are expected to ramp up only in subsequent quarters.
- The C-band incentive payments are not expected to be received until 2030-2031, meaning the deleveraging and shareholder returns from these proceeds will be delayed by several years.
Ladies and gentlemen, welcome to the SES half-year 2026 conference call. (Operator Instructions)
I will now hand over the conference to Christian Kern, Head of Investor Relations. Please go ahead, sir.
Thank you, [Gaia]. Good morning, everyone, and thank you for joining us today. It is my pleasure to welcome you to SES first-half 2026 results call on behalf of our management team.
Before proceeding with the management presentation, we would like to inform you that the financial information contained in this document have been prepared under International Financial Reporting Standards. As usual, this presentation may contain announcements that constitute forward-looking statements, which are not guarantees for future business performance and involve risks as well as uncertainties.
Also, certain results may materially differ from those in these forward-looking statements due to several factors. We invite you to read the detailed disclaimer on slide 2 of this presentation. The presentation is
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