SES: Continued Robust Performance

  SES: Continued Robust Performance

Business Wire

LUXEMBOURG -- November 8, 2013

SES S.A. (NYSE Paris:SESG) (LuxX:SESG) reports financial results for the nine
months and three months ended 30 September 2013.

1. FINANCIAL HIGHLIGHTS: Organic growth sustained

                                               
YTD Q3 2013 growth
                     As reported  At constant FX  Excluding analogue, at
compared to prior                                    constant FX
year period
Revenue              +1.4%        +2.4%           +5.7%
EBITDA               -0.3%        +0.8%           +5.3%

  *YTD Revenue of EUR 1,378.2 million

       *An increase of 2.4% at constant exchange rates (“constant FX”) over
         the prior year period; 5.7% when excluding the EUR 42.6 million of
         analogue revenue recorded in 2012

  *YTD EBITDA of EUR 1,009.3 million

       *An increase of 0.8% at constant FX over the prior year; 5.3% when
         excluding analogue
       *EBITDA margin of 73.2% (2012: 74.4%)

  *YTD Profit of the group EUR 413.4 million (2012: EUR 456.4 million)
  *Closing Net Debt / EBITDA ratio of 3.01 (30 September 2012: 3.02)
  *Fully protected contract backlog of EUR 7.4 billion, representing 4.1
    times 2012 revenue

Romain Bausch, President and CEO, commented:

“SES has delivered a robust performance in the year to date. We have increased
our capacity and are commercialising new market opportunities. Forthcoming
launches will further develop this capability and create the conditions for
future growth. Our European business, which is almost entirely Video DTH,
continues to grow (revenue +5.6%, when excluding analogue). New business and
renewals with major customers, including Sky Deutschland and Arqiva, have
contributed to an increase in the contract backlog to EUR 7.4 billion. In the
International segment (revenue +12.5%) we have added a number of new DTH
platforms, in Latin America, Africa, and the Asia-Pacific region. Although the
launch schedule continues to be subject to some delays, total revenue growth
(excluding analogue) was 5.7%, with considerable momentum from the video
business.”

“Despite some delays experienced earlier this year with regard to new
satellite launches, we have significantly expanded our capacity with the
launch of SES-6 in June and ASTRA 2E in September, and we now expect to launch
SES-8 later this month, followed by ASTRA 5B in early December.”

“SES’ 2013 revenue and EBITDA growth guidance at constant FX, of 3-4% and
2.5-3.5% respectively, and 5.5-6.5% excluding analogue, is reiterated.”

“Our performance to date as well as our fleet development underscore SES’
commitment to growing its presence in the developed markets and to accelerate
inroads in emerging markets. Our investments are focused on growth
opportunities based on differentiated offerings and secured anchor customers
in the video business. We are continuing to build DTH neighbourhoods. In the
data business, the numerous contracts signed so far this year underscore the
complementarity of SES’ geostationary satellite capacity with the High
Throughput Satellite (HTS) capabilities of the O3b Networks Mid-Earth Orbit
(MEO) constellation.”

“SES is now entering a period in which capital expenditure will reduce
significantly, even while additional growth investments are pursued. This,
coupled with rising revenue and EBITDA, will deliver strong growth in free
cash flow, which may be applied to further profitable investments and
acquisitions and/or be returned to shareholders.”

2. FINANCIAL REVIEW: Strong underlying growth continues

Year-to-date Financial Review

The prior year period included EUR 42.6 million in revenue and EBITDA from
four months of analogue DTH transmissions in Germany, which ended on 30 April
2012. This affects the reported year-on-year comparisons with 2013.

  *Revenue, ex-analogue and at constant FX, increased by 5.7%
  *EBITDA, ex-analogue and at constant FX, increased by 5.3%
  *Depreciation and amortisation reduced slightly
  *Effective tax rate of 13.3%
  *Net Debt/EBITDA ratio of 3.01
  *Contract backlog of EUR 7.4 billion

Reported revenue increased by 1.4% versus the prior year period to EUR 1,378.2
million. On a constant FX basis, revenue grew by 2.4%. Excluding analogue and
at constant FX, revenue growth was 5.7% year-on-year. This growth was driven
primarily by the strong increase in the International segment of 10.3% (+12.5%
at constant FX), as new and existing capacity were commercialised. European
segment revenue reduced slightly by 0.8% as reported (-0.9% at constant FX)
while showing healthy growth of 5.6%, excluding analogue. The North American
segment revenue decreased by 4.0% as reported, due to foreign exchange
movements, with an almost flat development year-on-year at constant FX
(-1.6%).

Operating costs increased by 6.1%, as the continuing favourable development of
services businesses delivered strong revenue growth, with an accompanying
increase in associated cost of goods sold. Excluding this, total operating
costs were tightly managed, increasing by only 2.1% at constant FX.

Reported EBITDA decreased by 0.3% versus the prior year period to EUR 1,009.3
million. On a constant FX basis, EBITDA grew by 0.8% with strong growth of
5.3% year-on-year excluding analogue, reflecting absolute gains in both
Infrastructure and Services segments. The overall EBITDA margin was 73.2%
(2012: 74.4%; 73.6% excluding analogue), reflecting the analogue switch-off,
the favourable development of services activities and an accompanying increase
in the associated cost of goods sold. The infrastructure margin was a robust
83.6% (2012: 83.8%; 83.1% excluding analogue), and the aggregate margin for
the services businesses rose from 14.2% in the first nine months of 2012 to
15.9% in the current period.

Depreciation and amortisation, as reported, reduced slightly from EUR 386.3
million to EUR 382.4 million year-on-year, while on a constant FX basis there
was little change (2012: EUR 382.0 million). Operating profit, as reported,
increased by 0.2% from EUR 625.7 million to EUR 626.9 million (+1.2% at
constant FX).

Reported net financing charges increased 3.2% year-on-year to EUR 127.4
million. At constant FX net financing charges were flat versus the prior year
period with lower financing cost offsetting a one-time charge of EUR 7.5
million taken in Q2.

An increase of EUR 28.0 million in the tax charge delivered an effective tax
rate of 13.3% (2012: 7.7%) This, coupled with an increased share of
associate’s losses at O3b Networks, resulted in a net profit of EUR 413.4
million, compared to EUR 456.4 million for the same period of the previous
year.

The group's Net Debt/EBITDA ratio at 30 September was 3.01 (2012: 3.02).

Compared to 30 June 2013, the group’s fully protected contract backlog grew
from EUR 7.1 billion to EUR 7.4 billion, an amount equivalent to 4.1 times
2012 group revenue. Important new business and renewals were recorded in the
quarter.

Third Quarter Financial Review

  *Revenue increased by 2.9% at constant FX
  *EBITDA increased by 3.2% at constant FX
  *Operating profit was up 5.0% at constant FX

Reported third quarter revenue of EUR 467.7 million was flat to the prior year
period. On a constant FX basis, revenue increased by 2.9%, despite the
favourable impact in the prior year period of the one-time recognition of
revenue associated with services rendered with the SES-3 Ka-band payload.

This growth was driven primarily by the strong increase in the International
segment of 12.9% (+18.7% at constant FX), as existing capacity was
commercialised and the first revenue from Oi in Brazil on SES-6 was
recognised. The European segment revenue increased by 3.4% (3.5% at constant
FX). Revenue in the North American region decreased by 18.8% (-13.9% at
constant FX), mainly due to the one-time Q3 2012 revenue recorded for services
rendered on SES-3, as mentioned above.

Operating expenses continued to be tightly managed, delivering a third quarter
EBITDA of EUR 347.3 million (+3.2% at constant FX), due to variable cost of
sales. The overall EBITDA margin for the quarter, at constant FX, was strong
at 74.3% (2012: 74.0%).

Operating profit for the quarter was EUR 218.3 million, an increase of 5.0% on
a constant FX basis.

3. FLEET DEVELOPMENT AND UTILISATION: Sustained development, Utilisation
growth

  *SES-6 launched and brought into service
  *ASTRA 2E launched 30 September
  *Available transponder capacity grew by 2%
  *Utilised transponder capacity grew by 4%

Notable developments in the third quarter were the conclusion of in-orbit
testing and subsequent entry into service of the SES-6 satellite at the end of
July, and the successful launch of the ASTRA 2E satellite at the end of
September.

A new launch date of 22 November has been set for the launch of SES-8 on
SpaceX’s Falcon 9 launcher. Consequently, SES-8 will commence commercial
operations in Q1 2014.

Available transponder capacity increased by 2% compared to 30 September 2012,
from 1,440 to 1,469, while utilised capacity rose by 4%, from 1,045 to 1,088
transponders. At 30 September 2013, the group satellite fleet had a
utilisation rate of 74.1%.

Utilisation - Europe

Available satellite capacity reduced by 16 transponders compared to Q3 2012,
as ASTRA 1F’s Gazprom mission was concluded during the quarter. Utilised
capacity declined by one transponder, with the 16 ASTRA 1F transponders being
offset by favourable developments at 19.2E, 5E and other European orbital
positions. The overall utilisation rate in the region stood at 81.8% at the
end of September. Average revenue per utilised transponder remained stable in
the discrete national markets served.

Utilisation - North America

Available satellite capacity reduced by 4 transponders compared to Q3 2012,
due to the reduction of the AMC-16 payload following the solar array circuit
failure recorded in Q4 2012. Following the migration of a customer’s network
from SES to third party capacity in Q3 2012 (8 transponders), and other
movements, utilised capacity reduced by 15 transponders, including the 4
transponders on AMC-16, compared to the prior year period, resulting in a
utilisation rate of 73.4%. Average revenue per utilised transponder remained
stable.

Utilisation - International

Available satellite capacity increased by 49 transponders. Utilisation
increased by 59 transponders, resulting in an overall utilisation rate of
71.0%. Average revenue per utilised transponder remained stable.

Forthcoming launches

Two further launches are scheduled in Q4 2013.

                                                    
            22 February   17 May                26 July     8 November
Satellite                                              
            (FY 2012)     (Q1 2013)             (H1 2013)   (Q3 2013)
SES-6      June         3 June               3 June     3 June
ASTRA 2E    June          July                  September   30 September
SES-8       June          Mid-August            October     22 November
ASTRA 5B   September    September / October  December   6 December

Satellite Health

SES operates a number of spacecraft that are susceptible to solar array
circuit failures. No reduction in commercial capacity due to additional
circuit failures occurred during the quarter.

4. GEOGRAPHIC MARKET SEGMENTS: Europe and International as growth engines

Europe

European segment revenue reduced slightly by 0.9% on a constant FX basis to
EUR 682.5 million, while underlying revenue showed healthy growth of 5.6%,
excluding the EUR 42.6 million of revenue from analogue transmissions in
Germany in the comparative period.

A multi-transponder, long-term contract for capacity at 28.2/28.5E was signed
with Arqiva. Sky Deutschland continued to expand its DTH operations and during
the third quarter secured renewal and additional capacity at SES’ prime
orbital position of 19.2E to further develop its business and support new
initiatives such as Ultra HD. Sky Deutschland is now using 13 transponders at
19.2E.

HD+ further developed its market penetration. At 30 September 2013, the
company had a customer base of 1.28 million paying households. Since the start
of the year, HD+ has successfully grown its customer base by 35%. HD+ will
expand the range of channels carried and is in advanced negotiations with
broadcasters who are planning HD distribution on the HD+ platform. The HD+
Replay service is also expanding, with the addition of access to the media
libraries of ProSieben, SAT.1 and kabel eins, which will go live in autumn
2013.

Nordnet signed additional capacity, in Ka-band, to support its satellite
broadband offering in France.

An agreement was signed with MonacoSat in respect of transponder capacity
which will be hosted on TurkmenSat. This satellite is scheduled to be launched
in 2015.

North America

North America segment revenue decreased by 1.6% to EUR 303.7 million compared
to the prior year period, on a constant FX basis.

North American activities remained broadly stable. KVH contracted new capacity
to meet the increasing demand for maritime broadband connectivity.
Aeronautical connectivity was an active area, as several North American
operators (Hughes/Row44, GoGo, Panasonic) signed contracts for satellite and
ground segment capacity to support their operations.

SES Government Solutions continued to perform well, with revenue ahead of the
prior year period. The budgetary constraints of the U.S. government had no
impact on SES’ activities during the first half of the year. The U.S.
government budget difficulties and the recent sequestration are expected to
have some influence on satellite operators' results during the second half of
the year. Therefore SES forecasts the corresponding revenues to remain flat
year on year, while good growth potential is still foreseen for the medium to
long term.

International

International revenue increased by 12.5% to EUR 392.0 million compared to the
prior year period, on a constant FX basis, as new capacity addressing emerging
markets was successfully commercialised.

DTH continues to be the most significant application driving new business and
revenue growth.

The successful launch and entry into service of SES-6 was accompanied by DTH
operator Oi’s improved DTH offering for the Brazilian market. Oi has
contracted the majority of the new Ku-band capacity in the Latin American
beams of SES-6. The North Atlantic beam on this satellite is also
substantially contracted for the provision of aeronautical broadband
connectivity, with agreements now in place with Hughes/Row44, Panasonic and
Gogo.

MNC SkyVision took additional capacity on the SES-7 satellite to provide new
Chinese-language DTH services in Indonesia. This Ku-band service will
complement the existing packages offered by MNC SkyVision in S-band from the
same orbital location.

In Africa, a new long-term, multi-transponder contract on SES-5 was signed
with Platco Digital, a southern African Free-To-Air operator. On the same
satellite, StarTimes, the company selected to take over the operations of Top
TV as part of the ODM Business Rescue process, has contracted two additional
transponders to support its business development in the southern Africa region
and to complement the three transponders already activated. Wananchi’s Zuku TV
completed its transition from NSS-12 to SES-5, contracting a further three
transponders to support its DTH offering in five countries in eastern Africa.

In line with SES’ consistent perspective on the African market, the recent
substantial increase in capacity supply is expected to result in some pressure
on pricing and volume growth, mainly in the data/enterprise segment.
Nevertheless, SES continues to see good growth in video as new DTH
neighbourhoods are built.

Cetel renewed existing capacity agreements and signed additional capacity to
serve the increasing demand for broadband connectivity in the Middle East.

OTHER DEVELOPMENTS: Preparing for further growth

O3b Networks

SES holds a minority strategic interest in start-up O3b Networks, which is
building a Middle Earth Orbit (MEO) satellite constellation of High Throughput
Satellites (HTS). O3b has developed a differentiated service offering that
both creates and serves a new market segment, the MEO constellation being
capable of delivering higher throughput, lower latency and greater flexibility
than geostationary satellites can provide.

O3b Networks launched its first four satellites in June 2013. Following
in-orbit tests, O3b has decided to execute modifications to the satellites 5
to 12. Satellites 5 to 8 are expected, subject to confirmation by Arianespace,
to be launched in late Q1 2014. Commercial service is expected to start in Q2
2014. Satellites 9 to 12 are expected to be launched in the second half of
2014. By year end 2014, O3b is therefore expected to have 12 satellites in
orbit, significantly increasing the network resilience and capacity.

Financing

During October 2013, SES issued a €500 million 5-year Euro bond with a coupon
of 1.875% (Mid-Swap +73bp), the lowest coupon in the company's history. The
proceeds have been applied to refinance existing debt. The successful offering
further strengthens SES’ liquidity profile and reflects the market's view of
SES as a strong investment grade credit, underlining SES’ ability to secure
funding on attractive terms.

Arbitration

At the beginning of September, the tribunal convened under the rules of the
International Chamber of Commerce dismissed a first claim by Eutelsat seeking
a declaration that SES cannot use the 500 MHz of German frequencies at the
28.2/28.5E neighbourhood without breaching a 1999 intersystem coordination
agreement between Eutelsat and SES.

Consequently, on 4 October 2013, Eutelsat ceased its transmissions on these
frequencies, which are now being operated and commercialised by SES.

Although the arbitration continues over remaining claims of Eutelsat, SES
strongly disagrees with Eutelsat’s position. In any event, SES and Eutelsat
are in discussions with a view to finding a solution regarding the subject
matter of the arbitration.

5. OUTLOOK AND GUIDANCE: Reiterated

Financial guidance

Despite the later launches of ASTRA 2E and SES-8, SES’ 2013 revenue and EBITDA
growth guidance of 3-4% and 2.5-3.5% respectively, is maintained. This
corresponds to a growth rate of 5.5-6.5% for revenue and EBITDA, excluding
analogue.

These expectations assume that the satellite health status remains nominal.

SES’ results for the 2013 financial year will be announced on Friday 21
February 2014.

Condensed consolidated income statement

In euro millions              Q3 2013   Q3 2012     YTD 2013   YTD 2012
Average U.S. dollar exchange   1.3197     1.2495         1.3150      1.2890
rate
                                                                     
Revenue                        467.7      467.7          1,378.2     1,359.6
                                                                     
Operating expenses             (120.4 )  (120.8 )       (368.9  )  (347.6  )
EBITDA                         347.3      346.9          1,009.3     1,012.0
                                                                     
Depreciation and               (129.0 )  (132.7 )       (382.4  )  (386.3  )
amortisation expense
Operating profit               218.3      214.2          626.9       625.7
                                                                     
Net financing charges          (44.9  )  (43.4  )       (127.4  )  (123.4  )
Profit before tax              173.4      170.8          499.5       502.3
                                                                     
Income tax expense             (21.3  )  (10.7  )       (66.6   )  (38.6   )
Profit after tax               152.1      160.1          432.9       463.7
                                                                     
Share of associate’s results   (6.4   )   (2.3   )       (18.7   )   (7.4    )
Non-controlling interests      (0.3   )   (0.1   )       (0.8    )   0.1
                                                                
Profit attributable to         145.4    157.7         413.4     456.4   
equity holders of the parent

Transponder utilisation by Regional Coverage

In 36 MHz-equivalent     Q3 2012  Q4 2012  Q1 2013  Q2 2013  Q3 2013
                                                                  
Europe Utilised           270       279       278       283       269
Europe Available          345       345       345       345       329
Europe %                  78.3%     80.9%     80.6%     82.0%     81.8%
                                                                  
North America Utilised    297       289       287       284       282
North America Available   388       384       384       384       384
North America %           76.5%     75.3%     74.7%     74.0%     73.4%
                                                                  
International Utilised    478       500       516       517       537
International Available   707       707       707       707       756
International %           67.6%     70.7%     73.0%     73.1%     71.0%
                                                                  
Group Utilised            1,045     1,068     1,081     1,084     1,088
Group Available           1,440     1,436     1,436     1,436     1,469
Group %                   72.6%     74.4%     75.3%     75.5%     74.1%

Revenue by Regional Coverage

As reported
                   Q3 2013  Q3 2012  Change   YTD 2013  YTD 2012  Change
(In euro                                (%)                             (%)
millions)
                                                                        
Europe              227.9     220.5     3.4%      682.5      687.9      -0.8%
North America       100.6     123.9     -18.8%    303.7      316.2      -4.0%
International       139.2    123.3    12.9%     392.0     355.5     10.3%
Group               467.7    467.7    0.0%      1,378.2   1,359.6   1.4%

At constant FX
                   Q3 2013  Q3 2012  Change   YTD 2013  YTD 2012  Change
(In euro                                (%)                             (%)
millions)
                                                                        
Europe              227.9     220.2     3.5%      682.5      689.0      -0.9%
  *Excluding                                     682.5      646.4      5.6%
    analogue
North America       100.6     116.9     -13.9%    303.7      308.6      -1.6%
International       139.2    117.3    18.7%     392.0     348.5     12.5%
Group               467.7    454.4    2.9%      1,378.2   1,346.1   2.4%
  *Excluding                              1,378.2   1,303.5   5.7%
    analogue

Quarterly development of operating results (as reported)

In euro millions              Q3 2012  Q4 2012  Q1 2013  Q2 2013  Q3 2013
Average U.S. dollar exchange   1.2495    1.2970    1.3291    1.2961    1.3197
rate
                                                                       
Revenue                        467.7     468.4     440.8     469.7     467.7
Operating expenses             (120.8)  (133.8)  (119.6)  (128.9)  (120.4)
EBITDA                         346.9     334.6     321.2     340.8     347.3
                                                                       
Depreciation expense           (124.2)   (155.0)   (116.1)   (120.1)   (120.2)
Amortisation expense           (8.5)    (14.8)   (7.9)    (9.3)    (8.8)
Operating profit               214.2    164.8    197.2    211.4    218.3

Quarterly development of operating results (at constant FX)

In euro millions      Q3 2012  Q4 2012  Q1 2013  Q2 2013  Q3 2013
                                                               
Revenue                454.4     464.3     441.9     465.0     467.7
Operating expenses     (118.0)  (131.9)  (120.1)  (126.9)  (120.4)
EBITDA                 336.4     332.4     321.8     338.1     347.3
                                                               
Depreciation expense   (119.9)   (153.5)   (116.3)   (119.0)   (120.2)
Amortisation expense   (8.6)    (14.7)   (7.9)    (9.3)    (8.8)
Operating profit       207.9    164.2    197.6    209.8    218.3

Analysis by Business Segment

In euro         Infrastructure  Services  Elimination /            Total
millions                                     Unallocated^1
YTD Q3 2013
Revenue          1,180.7          315.0      (117.5)                   1,378.2
EBITDA           986.5            50.0       (27.2)                    1,009.3
EBITDA margin    83.6%            15.9%      --                        73.2%
                                                                       
YTD Q3 2012
Revenue          1,190.5          280.9      (111.8)                   1,359.6
EBITDA           997.2            39.9       (25.1)                    1,012.0
EBITDA margin    83.8%            14.2%      --                        74.4%

^1 Revenue elimination refers to cross-charged capacity and other services;
EBITDA impact represents unallocated corporate expenses

Note: Constant exchange rate basis (‘constant FX’) compares figures using the
same exchange rates for the U.S. dollar and all other applicable currencies,
to remove distortions caused by currency movements.

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


TELECONFERENCES

A call for investors and analysts will be hosted at 14.00 CET today, 8
November 2013. Participants are invited to call the following numbers five
minutes prior to this time.

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