SES S.A.:
1) What is the rationale of the transaction? What is the
benefit for SES shareholders?
This combination creates a stronger and more competitive
multi-orbit operator with expanded network, increased revenue in
highly valuable and growth segments, stronger financial profile,
and greater ability to invest in the future to better compete in a
dynamic, fast-moving, and competitive satellite communications
landscape.
The combined company’s capabilities, alongside complementary
partnerships, will provide customers with enhanced coverage,
improved resilience, and greater flexibility, as well as enabling
the company to develop and deliver compelling solutions to drive
the specific applications that customers need.
The transaction is highly accretive to free cash flow per share
from Year 1 and delivers €2.4 billion net present value of
synergies (representing 85% of the equity value for Intelsat and an
annualised run rate of around €370 million) of which 70% will be
executed within 3 years after closing of the transaction (expected
during second half of 2025).
The combined company will have €9 billion of gross backlog
(end-2023), €3.8 billion of revenue (2024E), and €1.8 billion of
Adjusted EBITDA (2024E) which is expected to grow by mid-single
compound average growth rate (CAGR) and underpins a strong,
sustained cash flow generation outlook (see below).
2) What is the multiple implied by the
transaction?
Based on the mid-point of 2024E Adjusted EBITDA outlook, the
transaction represents an EV to Adjusted EBITDA multiple including
synergies of 2.75 times or 3.50 times excluding non-cash items of
around €175 million in 2024E which are expected to continuously
reduce to €20-30 million by 2030 bringing cash EBITDA closer to
accounting EBITDA.
$M
€M
Equity consideration
3,100
2,844
Net debt (end-2023)
1,741
1,597
Lease liabilities (end-2023)
537
492
Dividend paid to Intelsat shareholders
130
119
Expected U.S. C-band reimbursements
(475)
(435)
Enterprise Value
5,033
4,617
NPV of synergies
c.2,600
c.2,400
Enterprise Value (EV) including
synergies (A)
2,433
2,217
Adjusted EBITDA (2024E) (B)
870 - 900
800 - 830
Adjusted EBITDA excluding non-cash revenue
(C)
680 - 710
625 - 655
EV / Adjusted EBITDA (reported) (A /
B)
2.75 times
EV / Adjusted EBITDA (excluding non-cash
items) (A/C)
3.50 times
Net Present Value of synergies includes
c.€155 million (split c.70% in Year 1 and c.30% in Year 2) of
estimated costs to realise anticipated synergies and use a discount
rate of c.10%.
3) Can you explain the non-cash revenue noted in
Intelsat’s Adjusted EBITDA?
Previously, Intelsat had received upfront customer prepayments
on certain long dated contracts resulting in Deferred Revenue
Liability and interest accounting thereon (pursuant to ASC 606)
which leads to an unwinding through the Income Statement via
revenue recognition. These non-cash items are expected to be around
€175 million in 2024 and gradually reducing to €20-30 million by
2030, bringing cash EBITDA closer to accounting EBITDA. SES expects
most of these contracts to be renewed during the coming years
resulting in continued stream of cash generating revenue and
EBITDA.
4) What are the Contingent Value Rights as part of the
transaction?
At the Closing, SES will issue to Intelsat transferable
contingent value rights (CVRs) entitling the holders thereof to
42.5% of the net proceeds received by the combined company in
respect of any potential future monetisation of the combined
company’s usage rights for up to 100 MHz of the C-Band downlink
spectrum at 3.98 – 4.2 GHz. The remaining 57.5% of net proceeds
will be retained by the combined company.
The CVRs will terminate upon the earlier of (i) the full
monetisation of the applicable spectrum and (ii) the date that is 7
years and 6 months following the Closing (subject to extensions if
an event of monetisation occurs prior to such date, but the
applicable consideration has not yet been distributed to the CVR
holders).
5) How should investors/analysts model the combined
business? What are the main drivers?
The combined company is expected to deliver growing revenue,
Adjusted EBITDA, and Adjusted Free Cash Flow based on the
following:
2024E
Medium-term outlook (2024-2028)
Revenue(1,2)
~€3.8B
Low- to mid-single digit
CAGR with growth in Networks (60% of revenue) more than
offsetting lower Media revenue
Adjusted EBITDA(2)
€1.75 - 1.83B
Mid-single digit CAGR
including synergies.
Capital expenditure
€(1.0 - 1.1)B
c.€1.0 billion in 2025E.
Normalised capital expenditure for the combined company is expected
to be an average run rate of €600-650 million per annum for the
period 2025-2028
Cash interest expense
€325 - 350M
For first year (i.e., 2026E),
depending on market conditions, then stable to slightly decreasing
from 2027E.
Cash Income taxes
€40 - 60M
€40 - 60 million per annum over
the medium-term (2024-2028), excluding any tax payments related to
U.S. C-band proceeds.
All financial numbers based on an assumed
foreign exchange (FX) rate of €1: $1.09. Financial Outlook
information is conditional on nominal satellite health and nominal
launch schedule 1) Pro forma financial information are aggregations
of the corresponding SES and Intelsat financial information,
adjusted for the elimination of material intra-group transactions.
2) Includes c.€175 million of non-cash items in 2024E, expected to
reduce to €20-30 million by 2030E.
6) What will the key pro forma debt metrics look like?
Does the company expect to maintain its investment grade rating?
What will happen to the existing debt of the two companies?
On 31 December 2023, SES had reported gross debt of €4.2 billion
(including hybrid bond of €550 million payable in January 2024) and
a hybrid bond of €625 million with a combined weighted average
interest cost of about 3%; Intelsat had $3.0 billion (€2.75
billion) of senior secured notes at 6.5% due in 2030; and the
combined company had cash & cash equivalents of more than €4
billion.
In January 2024, SES repaid its €550 million hybrid bond with
cash, reducing SES gross debt to €3.6 billion. Looking forward SES
has debt maturities of €150 million in 2024 and €250 million in
2025. Additionally, the total amount of remaining U.S. C-band
clearing cost reimbursements expected to be received in future was
approximately €410 million for SES and approximately €435 million
for Intelsat as of 31 December 2023.
The transaction ($3.1 billion equity value plus approximately
€300 million of related M&A transaction costs) will be funded
from the existing combined resources plus the issuance of new debt
€3 billion, which is fully backstopped by a committed bridge
facility. This new debt of €3 billion is also expected to comprise
about €1 billion of new hybrid bonds, which will be treated as 50%
debt and 50% equity. Immediately after closing, the Adjusted Net
Debt to Adjusted EBITDA ratio (including 50% of hybrid bond(s) as
debt and 50% as equity) is expected to be approximately 3.5 times.
The Adjusted Net Debt to Adjusted EBITDA ratio is expected to
de-lever to below 3.0 times within 12-18 months after the
closing.
Prior to announcement of the transaction, SES engaged with both
Moody’s and Fitch in a rating assessment process with a positive
outcome. Both Moody’s and Fitch have subsequently reaffirmed their
existing investment grade rating for SES (Baa3 with stable outlook
for Moody’s and BBB with stable outlook for Fitch).
Financial information presented
Accounting recognition and measurement principles: SES financial
information presented using the recognition and measurement
principles of International Financial Reporting Standards (IFRS).
Intelsat financial information uses those of U.S. Generally
Accepted Accounting Principles (GAAP). The financial information
presented for SES and Intelsat does not apply a consistent set of
accounting policies.
Currency conversion: all financial numbers based on an assumed
foreign exchange (FX) rate of €1: $1.09. Pro forma financial
information are aggregations of the corresponding SES and Intelsat
financial information, adjusted for the elimination of material
intra-group transactions. Financial Outlook information is
conditional on nominal satellite health and nominal launch
schedule.
The following Additional Performance Metrics (APMs) are used:
“Adjusted EBITDA” is reported EBITDA excluding significant special
items as defined by SES and Intelsat respective managements,
including (but not necessarily limited to) reorganisation costs and
the impact of U.S. C-Band repurposing; “Gross Debt” represents
current and non-current borrowings plus 50% of perpetual hybrid
bonds; “Adjusted Net Debt” represents current and non-current
borrowings plus 50% of perpetual hybrid bonds, less cash & cash
equivalents; “Net Leverage” refers to Adjusted Net Debt divided by
Adjusted EBITDA; “Capital Expenditure (CapEx)” represents net cash
absorbed by investing activities excluding acquisitions, financial
investments, and U.S. C-band repurposing; and “Gross Backlog”
represents expected future revenue under existing customer
contracts and includes both cancellable and non-cancellable
contracts.
Forward looking statements
This communication contains forward-looking statements.
Generally, the words “anticipate,” “estimate,” “expect,” “project,”
“intend,” “plan,” “contemplate,” “predict,” “forecast,” “likely,”
“believe,” “target,” “will,” “could,” “would,” “should,”
“potential,” “may” and similar expressions or their negative, may,
but are not necessary to, identify forward-looking statements.
Such forward-looking statements, including those regarding the
timing and consummation of the transaction described herein,
involve risks and uncertainties. SES’s and Intelsat’s experience
and results may differ materially from the experience and results
anticipated in such statements. The accuracy of such statements is
subject to a number of risks, uncertainties and assumptions
including, but not limited to, the following factors: the risk that
the conditions to the closing of the transaction are not satisfied,
including the risk that required approvals of the transaction from
the shareholders of Intelsat or from regulators are not obtained;
litigation relating to the transaction; uncertainties as to the
timing of the consummation of the transaction and the ability of
each party to consummate the transaction; risks that the proposed
transaction disrupts the current plans or operations of SES or
Intelsat; the ability of SES and Intelsat to retain and hire key
personnel; competitive responses to the proposed transaction;
unexpected costs, charges or expenses resulting from the
transaction; potential adverse reactions or changes to
relationships with customers, suppliers, distributors and other
business partners resulting from the announcement or completion of
the transaction; the combined company’s ability to achieve the
synergies expected from the transaction, as well as delays,
challenges and expenses associated with integrating the combined
company’s existing businesses; the impact of overall industry and
general economic conditions, including inflation, interest rates
and related monetary policy by governments in response to
inflation; geopolitical events, and regulatory, economic and other
risks associated therewith; and continued uncertainty around the
macroeconomy. Other factors that might cause such a difference
include those discussed in the prospectus on Form F-4 to be filed
in connection with the proposed transaction. The forward-looking
statements included in this communication are made only as of the
date hereof and, except as required by federal securities laws and
rules and regulations of the SEC, SES and Intelsat undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Additional Information and Where to Find It
In connection with the proposed transaction, SES intends to file
with the SEC a registration statement on Form F-4 that also
constitutes a prospectus of SES. SES also plans to file other
relevant documents with the SEC regarding the proposed transaction.
No offer of securities shall be made, except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended. INVESTORS AND SHAREHOLDERS ARE URGED TO
READ THE REGISTRATION STATEMENT, PROSPECTUS AND OTHER DOCUMENTS
THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF
AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
shareholders will be able to obtain free copies of these documents
(if and when available), and other documents containing important
information about SES and Intelsat, once such documents are filed
with the SEC through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
SES will be available free of charge on SES’s website at
www.ses.com or by contacting SES’s Investor Relations Department by
email at ir@ses.com. Copies of the documents filed with the SEC by
Intelsat will be available free of charge on Intelsat’s website at
www.intelsat.com or by contacting Intelsat’s Investor Relations
Department by email at investor.relations@intelsat.com.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction. No offer of securities shall
be made, except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240505288223/en/
For further information please contact: Richard Whiteing
SES Investor Relations Tel: +352 710 725 261
richard.whiteing@ses.com
Sprott ESG Gold ETF (AMEX:SESG)
過去 株価チャート
から 4 2024 まで 5 2024
Sprott ESG Gold ETF (AMEX:SESG)
過去 株価チャート
から 5 2023 まで 5 2024