SES S.A. announced solid financial results for the first three months ended 31 March 2020 with performance in line with the company’s expectations and strong underlying revenue growth in SES Networks. The business has seen limited impact to date from the COVID-19 global pandemic but given the unprecedented impact on the global economy and on certain industry segments that the company serves, SES has proactively implemented a series of measures to mitigate the headwinds to be faced in 2020.
Steve Collar, CEO, commented: “We have made a strong start to 2020 with solid first quarter financial results including a step up in underlying revenue growth in SES Networks. Our Networks business now represents more than 40% of our business overall and mobility continues to stand out with 29% growth year-on-year as we have seen the full year contributions of important customer contracts signed during 2019. Strong control over discretionary costs in the quarter contributed to a reduction in recurring operating expenses year-on-year and reflects our ongoing focus on execution.
We have a strong, resilient business with predominantly fixed, long-term contracts and 85% of our expected revenue for 2020 already secured. To date our results have been largely unaffected by COVID-19. Nevertheless, the impact of the pandemic on the global economy and on several of the business verticals that we serve is profound and it is inevitable that we will be impacted as we support our most affected customers.
It is too early to provide an assessment of the revenue impact that COVID-19 environment will have on our 2020 performance. That said, we have ‘gone hard and gone early’ in implementing COVID-19 specific measures to mitigate impacts on EBITDA, including substantial limits on discretionary spend in the order of mid-double-digit millions for the year, and removed EUR 180 million from our capital expenditure programme over the next 4 years. We are focused on ensuring the safety of our employees around the world, maintaining business continuity, supporting our customers, and taking all steps to ensure that SES can emerge from this period in the strongest possible position. I am proud and appreciative of the incredible team at SES who have seamlessly adapted to the operational challenges presented by COVID-19 and continue to deliver critical services to our customers with the same quality and expertise as ever.
Looking beyond COVID-19, Simplify & Amplify, our strategic transformation programme, is well underway. We are executing on initiatives that will generate EUR 40-50 million annualised EBITDA optimisation in 2021 and beyond and we are making progress on the potential separation of our Video and Networks business within SES. Successful execution of this separation will provide greater visibility into our business for investors, increase operational focus and create strategic flexibility. We have set up a dedicated team to execute on the objectives of the U.S. FCC’s C-Band final Report and Order, including the ability for SES to earn up to USD 3.97 billion in acceleration payments for efficiently and effectively repurposing C-Band spectrum while protecting our broadcast neighbourhoods.”