TAMPA, Fla. — Eutelsat expects to return to growth next year as its pivot to connectivity starts to bear fruit, the French satellite operator said July 28 after a waning video business helped annual sales decline for the seventh year in a row.
Total revenues fell to 1.31 billion euros ($1.4 billion) for the company’s fiscal year ending June 30, a 5.5% year-on-year drop when adjusted for currency changes on a like-for-like basis.
Video revenues, representing about 62% of the operator’s business, were down by 8.3% to 705 million euros as sanctions against Russian and Iranian channels dragged on a market in gradual decline.
Revenues from government services also dropped 7.2% year-on-year to 143 million euros.
Meanwhile, Eutelsat’s mobile connectivity division was up nearly 29% to 110 million euros, driven by maritime customers as new connectivity-focused geostationary satellites come online.
British low Earth orbit (LEO) broadband venture OneWeb is vital to Eutelsat’s connectivity growth story.
Eva Berneke, Eutelsat’s CEO, said it is on track to take over OneWeb in September, subject to remaining regulatory approvals and a shareholder vote at the French company.
OneWeb reached its $50 million revenue target at the end of June, Berneke said, as it prepares to offer global services after completing the deployment of its constellation earlier this year.
However, she said Eutelsat is revising down the revenue projection for the combined group for the coming fiscal year by 2% following delays in the production and testing of OneWeb terminals.
Eutelsat now forecasts between 1.32 billion and 1.42 billion euros in revenues from its operating verticals for the coming 12 months. It expects OneWeb to provide 125 million and 225 million euros of that.
Excluding the effect of sanctions, Eutelsat said video revenue is set to suffer a mid-single-digit decline over the period, while mobile and fixed connectivity will see double-digit growth — also boosted by commercial traction from its recently launched Eutelsat 10B and Konnect VHTS geostationary satellites.
The LEO operator has an order backlog of $900 million, according to Eutelsat, up $300 million from October but the same figure reported in May.
Berneke said there is positive momentum in OneWeb’s backlog that is not included in this figure, including tests in remote islands around the United Kingdom and with the U.S. military. OneWeb has also switched focus to getting customers online instead of just building a pipeline of orders, she added.
The combined group expects to record between 725 million and 825 million euros in adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, for the next fiscal year.
That would be lower than the 826 million euros recorded for the 12 months to June 30, 2023 — also down 4.2% on the prior year — as Eutelsat and OneWeb invest in integrating their businesses.
Berneke also said Eutelsat, as part of a group featuring Europe’s largest space companies, is preparing to submit a proposal for a role in the European Union’s proposed multi-orbit connectivity constellation next week.
The deadline for the first round of proposals for Europe’s 6 billion euro IRIS² project, or Infrastructure for Resilience, Interconnectivity and Security by Satellite, is Aug. 7.
Berneke said the consortium is preparing to submit final proposals before the end of this year after discussing its initial bid with Europe, which is expected to pick winning bidders in February.
