Robust FY 2020-21 performance despite the ongoing challenges of the Covid-19 crisis
The Financial Year 2020-21 was once again marked by a tough external context related to the Covid crisis. Nevertheless, Eutelsat delivered a further robust performance with revenues at the top end of our range of objectives, industry-leading profitability, record cash generation and a further reduction in net debt.
Revenues for our five Operating Verticals stood at 1,201 million euros on a reported basis, and 1,220 million euros at the 1.14 euro/U.S. dollar rate on which our objectives were based, a 3.3% decline on a like-for- like basis. Nevertheless, we delivered a 74.7% EBITDA margin, down just two points year-on-year and among the highest in our industry. Cash Capex amounted to 342 million euros, well within our 400 million euros envelope, while Discretionary Free Cash Flow stood at 467 million euros on a reported basis. It means that over the past six years we have generated over 2.4 billion euros of Discretionary Free Cash Flow, which is more than our current market capitalisation. Our Net Debt/EBITDA ratio stood at 2.88x times, versus 3.05x times last year, a very comfortable level compared to our medium-term objective of around 3.0x.
On the commercial front, several major contracts were signed across all our applications. In Broadcast, we renewed at favourable terms our contract with our largest customer, Sky Italia, highlighting both the long-term resilience of the European Pay-TV segment and the ongoing relevance of satellite to serve it. We also secured a major incremental commitment from Multichoice in Sub-Saharan Africa. In Government Services, we were awarded a new EGNOS payload on HOTBIRD 13G with a total contract value of 100 million euros over 15 years, while our future Eutelsat 36D satellite was selected by Airbus to carry a new UHF payload. In Fixed Data, multiple deals were signed for new or expanded capacity for corporate networks and backhaul, highlighting improved volume trends. In Fixed Broadband, we signed a major wholesale agreement with TIM of Italy covering capacity on both EUTELSAT KONNECT and KONNECT VHTS, similar to our deal in France with Orange, and representing a contract value of almost 150 million euros. And finally, in Mobile Connectivity, we concluded an agreement with Global Eagle for capacity at 139° West. As a result, our backlog stood at 4.4 billion euros, up 7% year-on-year and representing 3.5 years of revenues.
2020-21 was a pivotal year for our Fixed Broadband rollout, with the EUTELSAT KONNECT satellite successfully launched, providing full coverage over Europe and Africa. Aside from the wholesale agreements with Orange in France and TIM in Italy, discussions with operators in other major markets are progressing well. On the retail side, we successfully integrated Bigblu Broadband and launched competitive retail offers in several countries across Europe. In Africa, multiple agreements in several major countries reinforced our distribution capabilities with wholesale agreements with leading service providers Paratus and Vox in South- Africa, a strengthened partnership with Nigeria's Coollink, and a contract with Facebook to accelerate the rollout of Express Wi-Fi hotspots across our African footprint.
The year also saw a key strategic development, with the securing of a foothold in the LEO segment through our investment in OneWeb, becoming one of its major shareholders. With a very limited number of seats at the non-geostationary table, OneWeb is ideally positioned to be among the winners thanks to its strong spectrum rights, first-mover advantage, and scalable technology, and comes with strong commercial potential for "win-win"co-operation thanks to complementarity of our respective resources and assets. OneWeb
offers compelling economic potential with revenues expected to reach c.1 billion U.S. dollars per annum in the three to five years following full deployment and a profitable wholesale approach.
Looking ahead, we continue to pursue our strategic roadmap based on two pillars: first, maximising cash generation from our heritage businesses to fund the transition towards high growth verticals, by maintaining all components under tension and fully delivering on our LEAP 2 cost savings; and second, deliver growth in Connectivity, in the medium-term, through our geostationary assets notably Fixed Broadband via EUTELSAT KONNECT and KONNECT VHTS and in other applications via EUTELSAT QUANTUM, our ground-breakingsoftware-defined satellite launched in July 2021, and the upcoming EUTELSAT 10B; and in the longer term, LEO-enabled through the development of commercial and technical cooperation with OneWeb to address broader telecom needs.
For FY 2021-22, we expect to generate revenues from the five Operating Verticals of between 1,110 million euros and 1,150 million euros at a euro/U.S. dollar rate of 1.20. Considering perimeter and currency effects, this equates, at mid-point, to a 3% organic decline versus FY 2020-21. Cash Capex will not exceed 400 million euros per annum for each of the next three fiscal years. This represents a slight improvement compared to the previous objective which was an average of 400 million euros.
It should be noted that the direction of Broadcast revenues, some 60% of the total, is expected to be broadly similar to FY 2020-21, as it will be impacted by the carry forward-effect of the slowdown in new business prevalent during most of this fiscal year. The trend is expected to improve thereafter.
Our objective of Adjusted Discretionary Free Cash Flow for FY 2021-22 now stands at 400 million euros to 430 million euros at a euro/U.S. dollar rate of 1.20, representing a 30 million euro uplift at comparable currency versus the previous objective. It is expected to grow in FY 2022-23 and in 2023-24.
The subsequent years are set to mark the end of the negative revenue trend, with the arrival and ramp-up of substantial incremental capacity, much of it with firm pre-commitments. EUTELSAT KONNECT is already significantly de-risked with wholesale commitments from Orange and TIM and paving the way for KONNECT VHTS which will start operations in H1 2023, representing a further major milestone in our Connectivity strategy in Europe. The abovementioned EUTELSAT QUANTUM is set to enter service in the fourth quarter of calendar 2021. Positioned at 48°East and with its unrivalled flexibility and joint distribution agreement with Intelsat, it will represent a compelling offer for Government customers. HOTBIRD 13G, mostly a replacement satellite for Broadcast, will also carry an incremental EGNOS payload which will bring some 7 million euros in annual revenues over 15 years from January 2023. EUTELSAT 10B, due to start operations in H1 2023 will bring incremental high- throughput capacity for Mobile connectivity over EMEA with substantial precommitments both on HTS and regular capacity payloads. EUTELSAT 36D, due to start operations in H2 2024, will embark an incremental UHF payload operated by Airbus.
We remain committed to delivering a compelling level of shareholder returns and reiterate our stable to progressive dividend policy. We are recommending a dividend of 0.93 euro per share in respect of FY 2020-21 up 5% and covered more than two times by Discretionary Free Cash Flow.
Universal Registration Document 2020-21
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