Hello, and welcome to the Eutelsat First Quarter 2024-2025 Revenues Call. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, press star zero, and you'll be connected to an operator. I will now hand you over to your host, Christophe Caudrelier, CFO, to begin today's conference. Thank you. Hello everyone, happy to be here with you today. I am Christophe Caudrelier, Group CFO, and I am joined today by Joanna Darlington, Head of Communication and Investor Relations. On the agenda today, we will cover the highlights of the first quarter, the Q1 performance, as well as the outlook and financial objectives. Let's start with the highlights of the past quarter. First quarter revenues were in line with expectation, enabling us to confirm all our full-year 2024-2025 financial objectives. Connectivity applications continue to see growth, mostly on the back of LEO-enabled solutions. On the operational front, we saw the successful launch of the latest batch of 20 OneWeb satellites, reinforcing the constellation, and we secured a multi-launch agreement with Mitsubishi Heavy Industries, adding further optionality for access to space. As I stated above, we successfully launched a batch of 20 OneWeb satellites on October the 19th. Adding these satellites will increase network strength and redundancy, particularly in the context of the end of life of some of the first satellites of the constellation. Let's turn now to the Q1 performance. As a usual reminder, all commentary is on a like-for-like basis, that is to say, at constant currency and perimeter. Total revenues for the first quarter stood at EUR 300 million, up by 5.9% on a like-for-like basis. They reflected a perimeter effect of EUR 8 million, reflecting the acquisition of OneWeb, a EUR 1 million positive currency effect, as well as a EUR 2 million positive swing in other revenues, mainly from hedging. Excluding other revenues, revenues of the four operating verticals were up 5.5% on a like-for-like basis. Moving to operating verticals details, video representing 51% of revenues stood at EUR 152 million, a decline of 7.3%. Fixed connectivity revenues, representing 19% of the group total, rose 30.1% to EUR 57 million. Government services, 16% of revenues, stood at EUR 46 million, a rise of 20.3%. And finally, mobile connectivity revenues, representing 14% of the group total, stood at EUR 42 million, a rise of 18.8%. Starting with video, Q1 video revenues amounted to EUR 152 million, down 7.3% year on year, reflecting the secular market decline in this application. Professional video revenues, which account for under 10% of the video vertical, also decreased, reflecting lower occasional use, and despite a small boost from the Summer 2024 Olympic Games. On a quarter-on-quarter basis, revenues were down by 4.5%. On the commercial front, Eutelsat secured a number of contracts, notably with the renewal of its agreements with key customers, including Al Jazeera for broadcast in the Middle East and Cable Color for Latin America. Elsewhere, Eutelsat signed a new partnership with TV Plus for coverage of Australia and New Zealand, confirming Eutelsat 172B as one of the new go-to positions for broadcasters in the region. First quarter fixed connectivity revenues stood at EUR 57 million, up 30.1% year on year. They mainly reflected the acceleration in LEO services driven by the NEOM contract, as well as the calendar effect of the entry into service of Konnect VHTS in Q2 fiscal year 2024. Quarter on quarter, revenues were down by 30.9%, mainly reflecting a high level of equipment sales, as well as the recognition of catch-up revenues, which boosted Q4 fiscal year 2024. Commercial wins in the quarter included a deal with Bayobab, a subsidiary of the MTN Group, which will leverage the OneWeb LEO constellation under a multi-year agreement to deliver connectivity for enterprises and cellular backhaul across Africa, as well as a contract with SoftBank to deliver connectivity for businesses and government agencies throughout Japan, and marking Eutelsat's entry into the Japanese markets. First quarter government services revenues stood at EUR 46 million, up 20.3% year on year. This rise reflected the contribution from LEO-enabled connectivity solutions. On a quarter-on-quarter basis, revenues were broadly stable. The latest renewal campaign with the U.S. Department of Defense for 2024 resulted in a renewal rate of above 80%. First quarter mobile connectivity revenues stood at EUR 42 million, up 18.8% year on year. They mainly reflected the ongoing strong growth of LEO-based connectivity solutions, as well as GEO solid performances, notably in aviation. On a quarter-on-quarter basis, revenues were down by 14.6%, notably due to equipment revenues recognized in Q4 fiscal year 2024. On the commercial front, Inmarsat Maritime selected Eutelsat's OneWeb Low Earth Orbit network for integration into its NexusWave managed connectivity solution. Moving now to the backlog, it stood at EUR 3.9 billion at the end of September 2024 versus EUR 3.4 billion a year earlier, and stable versus end of June 2024, representing 3.2 years of revenues. It reflected natural erosion in the video segment, offset by the contribution of OneWeb. Connectivity represented over half of the backlog, accounting now for 55% versus 42% a year ago. Let's now turn to the outlook. The first quarter performance was in line with our expectations, enabling us to confirm our fiscal year 2024-2025 objectives. That is to say, combined fiscal year 2025 revenues of the four operating verticals are around the same level as fiscal year 2024, and Adjusted EBITDA margin slightly below the level of fiscal year 2024, and gross capital expenditure in a range of EUR 700 million- EUR 800 million. We also continue to target a leverage level of around three times in the medium term. With that, I thank you very much for your attention, and together with Joanna, we are now ready to take your questions. Thank you. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. If you change your mind and want to withdraw your question, please press star two. Please ensure your lines are unmuted locally as you'll be prompted when to ask your question. The first question comes from the line of Alexander Peterc from Bernstein. Please go ahead. Yes, good afternoon, and thank you for taking my question. I just have three. So the first one is on video declines that were a little bit worse than we expected. Could you help us understand if this is the new now? So we're in the 7%-8% decline year on year range, like-for-like, or do you stand by your mid-single digit decline, which was, I think, the former indication? And if so, what explains this Q1 was below this trend? Secondly, on mobile, that decelerated quite a lot in terms of year on year growth, 18%. This is the lowest growth you've had in more than two years in this vertical. So help us understand, are we overestimating the contribution of OneWeb to this vertical, or is anything else going on here exactly? Maybe did you have a lot of equipment sales in the year-ago comp? And then the third question is on the ground infra deployments. Where do you stand now? Is it now fully complete, or when do you expect the completion, and anything new on the disposal of the ground segments? Thank you. Okay, thanks, Alex, for your question. So let me start with your question related to video decline, which you qualified as a bit stronger. I mean, I think we remain with our objective of a mid-single digit decline in line with the market. What we are continuing to see in the mid-single digit declines is probably more on the high range of the mid-single digit rather than the low range of a mid-single digit decline for the market. So again, having said that, video revenues are fully in line with what we had budgeted and planned for the Q1. So there are just, I would say, nothing much to say on this. You sometimes also have the phasing of some contracts that might explain a slight difference from one quarter to another, I would say. But what is important during this quarter is that we have confirmed some significant contracts with some customers, including new customers. So I would say that nothing to add compared to what we said previously or in the past in our trend on video, and nothing to add, I mean, in addition to that. On your question regarding the growth of mobile connectivity, I think it's a combination of several things. First of all, as you recall, last year, we had the entry into service of new capacity in the GEO segment, which boosted the growth. So definitely, we had a kind of exceptional growth if you compare to last year compared to the prior years. And again, this was related to the addition of capacity. This year, what we say is obviously, and the capacity was mainly Eutelsat 10B to be precise. This year, obviously, we have the addition of the LEO activity. What needs also to be taken into consideration when you compare year on year, but also when you compare quarter on quarter, on the LEO segment is at least in the Q4 2024, we had significant sales of what we call UTs, so user terminal, which obviously boosted the sales for the good, because obviously, the more UT you sell, it's a future business that you trigger. Going to your last question regarding the deployment of the ground, so here we are mainly speaking of what we so-called SNP for the LEO business. As we speak, so we have 38 SNPs that are fully operational. We still have more to go, four more to go in the coming months. There are different steps, I would say, of development. Having said that, to be a bit more precise on your question, what is important to notice is that, first of all, we have opened some significant markets, including Japan and Taiwan, with the addition and the start of the ground network. Thailand is also on a good way. We still have regulatory, I would say, processes ongoing in India, but we are confident that we would be able to open the service in the months, I mean, not in the two or three months to come, but in the future. We still have, as I said, four SNPs under construction, one in Saudi Arabia, one in Africa, and two in the ocean. On the disposal. Alex, just on your question on mobility, I mean, just to say Eutelsat 10B entered service in July 2023. So basically, throughout 2024, you had a positive uplift from that, whereas throughout the current year, that is now fully embarked, which means that the growth is, the comparison is obviously less favorable. Okay. Thank you. And just on the disposal process, completion and so on, ground? Say again? On the disposal of ground infra, is there any update on that, on the completion? No, the process is still ongoing. As you know, I mean, it's a long process. We already said that it would take at least probably 18 months, so probably no closing before early 2026. And again, this is related to, first of all, all the regulatory aspects. We will have to transfer some equipment and make sure that we have all the approval in order for the AntennaCo to run the businesses. But as well, also all the carve-out work that needs to be done, mainly internally, but those are the two main reasons why it takes, or our assumption is that it would take around a year and a half between signing and closing. But everything is on track for the moment. The teams are working hard on the processes. And we are going through certain processes to finalize the CPs, but everything is on track as we speak. That's great. Thank you very much. Before proceeding to the next question in queue, as a reminder, if you would like to ask a question, please press star one on your keypads. The next question comes from the line of Roshan Ranjit from Deutsche Bank. Please go ahead. Good evening, everyone. Thanks for the questions. I've got three, please. First one, just to quickly follow up on the previous one around video. You highlight the professional video impact this quarter. Is that having a bit more of a pronounced decline on the overall video trend, would you say, or can you, I guess, weigh in on that, given that the renewals of the core video business seem to be quite strong? Secondly, on fixed connectivity, you highlight the ramp-up of the NEOM contract. I think that contributed in last quarter. Is it possible to get a sense of the ramp-up quarter to quarter within that contract, please? And lastly, we saw one of your peers win quite a few in-flight contracts over the last few quarters, a few weeks, I should say, particularly one with Air France. I appreciate you guys use a different go-to-market approach with resellers and your wholesale model, but it would be interesting to know whether your kind of reseller partners did tender for that Air France contract and any feedback you could give as to why the competitor won over your offering would be very helpful. Thank you. Yeah, thanks, Roshan, for your question. So coming back first with your question related to professional video and occasional use, I mean, it's not a significant portion of our video revenues and our total sales. It's less than 10%, I would say. And as usual, they're quite erratic. And depending on the events or depending on the specific items happening in the regions where we are. So I mean, I would say that we don't see anything very much different from the global video business. And the decline, the trend of the decline, I would say, is quite similar to the other business or the other activities of the video business. So nothing particular to add on this. Related, then moving to the NEOM contract, I mean, we don't disclose any detail on specific contracts, as you know. I mean, you already know because I think we already mentioned that it's a multimillion contracts over many years. What happened, just to recall what happened, is in the Q4 of 2024, we had, I would say, a hiccup or an increase in the revenues due to the recognition of revenues starting from the beginning of the year and a catch-up, and that's the reason why we also had this positive impact in Q4. Obviously, in Q1 2025, we continue on the same trend, but we don't benefit anymore from this catch-up, and in the last question, obviously, you referred to the announcement that was made by Air France and Starlink on the aero business. I mean, it's not surprising that, again, Starlink addresses this kind of business and the aero business. Will not start in the coming months, I mean, for sure. I mean, this will be not before 2025, and whether we were part of the, I mean, I'm not aware of a tender, and I mean, we usually don't disclose, I mean, the business processes or business acquisition processes, so I mean, on the other side, what I can say is that, as you know, we signed a significant contract with Intelsat, and this is mostly for aero, so we are part of the aero business. Our go-to business model, as you mentioned, is not direct. We're not going directly to the airlines or to the manufacturers, but we go through the wholesalers, and one example of this is, again, the contract that Eutelsat signed with Intelsat. That's very helpful. Thank you. And just on the last point around go-to-market approach, could that be reviewed? Could you envisage a scenario where you use both resellers and maybe a direct approach? I mean, I don't think so. And I would say it's not the plan as we discussed. I mean, we have a clear business model. We are not direct to B2C, for sure. And again, I mean, our business model is to go through wholesalers. And because obviously, I mean, you have a lot of value added into this way of doing business. And again, I don't think it's not the plan as we speak. Got it. Thank you. The next question comes from a line of Stephane Beyazian from ODDO BHF. Please go ahead. Yes, thank you. Good evening, everyone. I've got three questions, if that is possible. The first one is regarding IRIS². If you could update us a little bit. It seems that there has been a little bit of progress there, and I think my bottom line question there is, is there a scenario where IRIS² can reduce or even perhaps replace the need for Eutelsat to build a Generation 2 OneWeb constellation? My second question is also on OneWeb. Could you give us an idea of the percentage of contracts from the order book that are already invoiced versus the ones that are not activated yet? I guess what I'm trying to understand here is whether there will be a jump in the revenues over the next six months as you finalize the constellation and it is fully up and running, and whether, therefore, we should have an acceleration in the revenues being built by OneWeb. My third question, if that's possible, to push a little bit on the ground infra deal. I know, obviously, the closing is surely not in the very near term, but nevertheless, you've worked out some things already. Can you tell us a little more about the leasing cost, the net impact between some costs that will no longer be with you, but also the leasing cost, what sort of net impact you're expecting, and how you will be accounting for the leasing, whether that will be in your P&L or will just be in the cash flow statement? Any flavor, and even if not everything is finalized just yet, that'd be super useful. Thank you very much. Okay, Stephane. So first, on IRIS², it is progressing, and I think it's progressing on the positive side. We are very optimistic at this point, but I would say that I have nothing else to say today, not in a position to say anything today, but again, we are really positive and really optimistic on this. The question, I mean, back to IRIS², on the question related to the fact that could it replace the Gen-2 if I or the next gen? I mean, yeah, I mean, let me come back to the purpose or the principle of the IRIS² project. I mean, it would be a constellation which is a multi-orbit constellation owned by the European community. It would comprehend GEO, MEO, and LEO. The purpose is what the so-called PPP project, where, I mean, Eutelsat, as well as the other satellite operators part of the consortium, being SES and Hispasat, would have access to some of the capacity, not use the unused capacity, the capacity which would not be used by the European community and available for us on the LEO side. What else can I add on this one? If your question is related to the fact that would it replace OneWeb or, I mean, no, obviously not. I mean, OneWeb will continue to exist. OneWeb will continue to assure and to serve its customers. And OneWeb will continue to address the markets that we are having today and that we are developing today, which are totally different or separated from IRIS². So that's what I can say. Second question related to, if I understand well, what is the proportion in the backlog related to LEO, which is not yet, I would say, triggered in our revenues? What I can tell you is that a significant majority of the amount that we are talking, or the significant majority of the backlog related to LEO business, is not yet, I would say, started or recognized in revenues. Obviously, we have mentioned the business with NEOM. NEOM is part of it, but I would say the vast majority of the backlog is not yet started and accounted for in the operating verticals revenues. Do you have an, sorry. Sorry. Sorry, Stephane. Oh, sorry. And if I can just push a little bit on that. Do you have an idea because I know that the OneWeb constellation is not fully up and running, and probably that is also a reason why not everything is just yet being serviced. Do you have an idea, or is there a specific quarter where we could see a big jump in the number of contracts that are activated and built? If you see what I'm trying to say. Yeah, I see what you mean. I mean, it's quite progressive and depending on the area or the vertical. So it would be, I think, a bit difficult for me to be precise on this one. And if your question is, do you expect to have a significant jump at some point, I would say no. It's rather a progressive ramp-up. And the ramp-up will come from both the recognition of what is today in the backlog, as well as the pay-as-you-go ramp-up, that is to say more the contracts that go and where we will see the increase in revenues. But I don't expect to have a sharp wall, I would say, or increase at some point in a certain quarter. Moving to your question related to the ground infrastructure, most of the cost after closing will be or should be recognized as OpEx. There might be a small proportion of the business that would be considered as leasing. The study is still undergoing. As you know, we are talking of many different realities and a complex subject. So we are looking at that, I would say, not asset by asset, but almost. But what I can say is that clearly, we are confident that a vast majority of the assets that are concerned by the deal will not be treated post-closing as a lease or as a lease-back, that is to say, more technically speaking, under IFRS 16. There might be a small proportion that could go into this. In terms of net impact, we don't disclose this kind of information, so I can't answer precisely to that question. Okay. That's fair enough. Thank you very much for your answers. As a final reminder, if you would like to ask a question, please press star one on your keypad. The next question comes from a line of Ben Rickett from New Street Research. Please go ahead. Hi, Christophe. And thank you for the question. I just had two follow-up questions, please. So firstly, your connectivity backlog is pretty stable at around EUR 2.1 billion. Are you able to quantify how much of that is OneWeb? And also, can you say anything generally about whether the OneWeb backlog has been growing? Have you signed contracts since the Intelsat contract? And then second question, just trying to understand the revenue growth trends. So your connectivity revenue is growing 25% on a like-for-like basis. Within that, is GEO connectivity revenue also growing? And can you help us quantify that growth? Thank you. Sorry, Ben, I might ask you a bit more on precision on the second one. But on the first one, related to the trend of the connectivity backlog, I mean, what we see is we continue to have a growth of the first of all, we do not disclose, and we will not disclose, and sorry to precise that, we will not disclose the split between LEO and GEO and between OneWeb and the other, as already mentioned. So I know it's a bit frustrating, but that's what we are doing. What I can say is, again, coming back to the trend on the connectivity, we had a significant growth of GEO connectivity backlog in the prior years. And again, this was coming from the addition of significant capacity that we did in the past years, and mainly last year in the GEO. So what we see on one side is we see part of the consumption of this backlog in the connectivity GEO business, which is more than offset by a growth of the OneWeb or LEO backlog. As I mentioned also before, it's more a business, or it's a combination of a take-or-pay business as well as businesses that are pay-as-you-go. The contracts in the connectivity overall are much shorter than what we see in the video business. So clearly, the indicator needs to be read differently. But what I can tell you is, yes, I mean, we continue to see a growth of the pipeline and of the backlog on the LEO side. And the second question, sorry, maybe I. The second question. Your second question was about the contribution of GEO to growth in connectivity? Exactly. I'm just trying to understand whether GEO connectivity is growing. Yeah. I mean, I think we were quite clear on that at the full year results. So you have last year, we did have quite a big uplift in GEO revenues because, as Christophe reminded, we had a couple of new satellites that came online which were pre-sold. One of them was Eutelsat 10B, and the other one was Konnect VHTS. So you had kind of quite a big mechanical uplift. But obviously, that's now baked in. If you look at 2025, we don't expect to see GEO growth of the same level as previous years. Most of the growth in connectivity is coming from LEO. On the backlog, as Christophe said, we don't break out the OneWeb and Eutelsat separately. But if you remember the last time we did, which was before the merger last year, the OneWeb backlog was standing at around EUR 800 million. So I mean, we're obviously not going to continue giving you that number going forward, but it gives you a base to start. And yes, we have signed new LEO contracts. I mean, they're not obviously as important as the Intelsat, but if you look back, I mean, we announced the contract with SoftBank for Japan, Bayobab for Africa, and we're just opening up in Taiwan. So yes, I mean, the LEO business is growing. Okay. Thank you both. A follow-up question from Roshan Ranjit from Deutsche Bank. Please go ahead. Okay. Thank you. Hopefully, very, very quick. Just on the mobility part of the business, you highlight in the slide a good performance in GEO, notably in aviation. Could you give us some more details there? Is that business aviation, or is this kind of a new maybe growth area which we can expect contribution in the coming quarters? And secondly, can you just remind us where we are with the RFPs? Because you had sent RFPs out, I think, at the beginning of the year. Again, I appreciate you highlighted last quarter that the Gen-2 plan is in flux as we're waiting to crystallize the details of IRIS². But are those RFPs on hold, or what are your kind of partners saying about that? Thank you. Yeah, Roshan. So on the aero, the precision on the aero, I mean, what we see is mainly, again, there, the impact of the E10B addition and the continued growth and ramp-up of the capacity related to E10B. So that's what we refer to in the comments. Is that like business aviation then? Who is the end customer? What is the end customer? Yeah. So, Roshan, I mean, the other thing, we do have a lot of aviation contracts on the fixed on the GEO side. Some of those are take-or-pay. So, I mean, that's, I mean, it's partly explained by that. And then as to whether it's, I mean, it's not specifically for business jets. I mean, as you know, we sell mainly wholesale, so that goes mostly. Thank you. And just on the RFPs, is there an update there? I mean, again, and the reason why we clarified on the guidance on the CapEx for this year, and we are still working on different options, and again, and you mentioned it, IRIS² is obviously an important project and may have some significant impacts depending on which way it goes, so we're still working on the different streams in order to define and work on what would be the best solution for the next gen, so as of today, I mean, nothing more to add on this. I mean, the teams are still working on this. Obviously, I mean, we are focused on the continuation of the business, provide the services, develop the services, and continue to provide the services to the customers worldwide, and the subject of the next gen is still ongoing. So nothing, again, nothing much to add at this point to come at a later stage. Great. Thank you very much. Other follow-up question from the line of Stephane Beyazian from ODDO BHF. Please go ahead. Yes. Thank you. One follow-up. I mean, it seems to me that what you're telling us is the dimension of Gen-2 also depends on what's happening with IRIS², if you can sort of confirm that. And can you remind us, let us estimate for the cost of Gen-2? Because in the past, you've made some comments about how much Gen-2 would potentially cost. And just one additional on the equipment sale. Could you confirm that the first quarter, I mean, Q4 was probably exceptional? But can you confirm that the first quarter is a sort of normal quarter in terms of equipment sale or whether it was particularly low, perhaps because Q4 was particularly high? Thank you. On equipment sales, I mean, obviously, the sale of equipment is important because it's the preamble to obviously the service coming on stream. And we don't break it out, but we've explained in the past that at the moment, the equipment side is still quite a strong proportion of the connectivity revenue. So I wouldn't say that the first quarter was a particularly low quarter. No. That's the first thing. The second question on next gen, I mean, there's no particular update on the cost. The last figure we gave, or the last indication, which I think has been extrapolated fairly accurately by the market, is that we expected to spend about EUR 2.5 billion on the next generation. That hasn't evolved, I would say. And the exact cadence of that and the timing will depend, as Christophe said, on the various options that we're exploring in terms of what next gen could look like and where the funding would come from, whether we have partners, what would that look like. I mean, I think with IRIS, I mean, at the moment, we haven't actually. There's no concrete news on IRIS, although, as Christophe said, we're pretty confident now that it's going in the right direction. And IRIS won't replace OneWeb, but it could certainly be complementary to OneWeb. And there are lots of different ways that could look. I mean, one of the most obvious is that IRIS, the whole of the capacity of IRIS won't be taken up by the EU's sovereign need. So there will be capacity which could be commercialized by the operators. It's possible to envisage that OneWeb or that IRIS could carry payloads for other operators. Of course, one of the advantages of being part of a consortium is that you're kind of pooling your R&D and your technology research. There are lots of hypotheses, but we're not in a position to confirm exactly what that will look like and what the timing will be. Very good. Thank you. There are no further questions, so I hand back to your hosts to conclude today's call. Okay. Thank you very much. So thank you, everyone, to all your questions or your interest. And now we will see you and meet you for the half-year results in February. Have a good evening. Bye-bye. Thank you for joining today's call. You may now disconnect your lines.