Eutelsat Communications: Quarterly Financial Information

Eutelsat Communications: Quarterly Financial Information

Eutelsat Communications Reports Revenue for First Quarter 2008-2009 and Confirms Objectives for Growth

PARIS, November 4/PRNewswire-FirstCall/ --

- Sustained Revenue Growth of 7%(1) Year on Year
- Continued Strong Performance of Video Applications, up by 5.4%
- 16.4% Increase of TV Channels Broadcast by Eutelsat's Video
Neighbourhoods
- Eutelsat Reconfirmed as the Leading Satellite Operator for HDTV With
63 Channels Broadcasting in the EMEA Region(2)
- Sharp Increase in Data and Value Added Services, up 10.3%
- Data Services up by 7.8%
- Robust Progress of Value-Added Services, up by 19.3%
- 2008-2011 Objectives Confirmed

Eutelsat Communications (ISIN: FR0010221234 - Euronext Paris: ETL), one
of the world's leading satellite operators, today reported its revenue
figures for the first quarter ended September 30, 2008.

Revenue by application

1st quarter ended September 30 Change
EUR M 2007 2008 In in %
millions
of euros

Video Applications 158.1 166.7 +8.6 +5.4%

Data and Value Added Services 37.2 41.1 +3.8 +10.3%

Value Added Services 8.2 9.7 +1.6 +19.3%

Multi-usage 14.5 15.6 +1.2 +8.0%

Other Revenues 2.0 3.2 +1.2 n.s.

Total 211.9 226.7 +14.8 +7.0%

Commenting on 2008-2009 first quarter revenues, Giuliano Berretta,
Chairman and Chief Executive Officer of Eutelsat Communications said:

"With revenue growth of 7% in our first quarter reflecting the
expansion of all activities in our markets, Eutelsat's performance underlines
the efficiency of our strategy. Broadcast and broadband activities, which
generate more than 80% of our revenues, show significant dynamic as well as
potential for further expansion as more and more countries transitioning into
a fully digital environment have recourse to satellites to ensure that all
homes and businesses can benefit from access to digital services. With 3,180
channels broadcasting at the end of September, showing a 16.4% increase over
one year, Eutelsat reconfirms its leadership for satellite broadcasting in
the EMEA region. Over 60 HD channels are now broadcasting via our key video
neighbourhoods, anchoring Eutelsat as a key satellite operator for this new
and rapidly-expanding video business.

Our Data and Value-Added Services activity has also shown
strong performance, driven by the on-going take-up of the D-STAR broadband
service for enterprises and local communities, and notably by the strong
recovery of Data Services which showed solid revenue growth of almost 8%.
Furthermore, our new Tooway(TM) consumer broadband service is already
distributed in 15 countries.

With sustained demand across all our markets, both in European
Union countries and in our 'Second Continent' of Russia, the Middle East and
Africa, Eutelsat is confident of meeting its objective of more than 900
million euros of revenue for fiscal year 2008-2009 and an objective of a
compound average growth rate of 6% for the period 2008-2011, accelerating
during the period.

In terms of in-orbit resources, next month will be marked by the launch
of the first two satellites in our investment programme of seven satellites
to enter service by the end of 2010. This programme will enable us to
increase our in-orbit Ku-band capacity by 30%, raise in-orbit security at key
video neighbourhoods to industry-leading levels, and radically expand
resources for Ka-band consumer broadband services to significantly contribute
to bridging the digital divide in Europe and the Mediterranean Basin. With
this roadmap we can look to the future with confidence."

First Quarter Activity

Unless otherwise specified all growth indicators or
comparisons are made against the first quarter of the prior year. Turnover
breakdown by applications is calculated excluding "other revenues".

Video Applications (74.6% of revenue)

Video Applications show sustained revenue growth of 5.4% to
166.7 million euros.

With 3,180 channels broadcasting at the end of September,
showing a 16.4% increase over last year, Eutelsat reconfirms its leadership
for satellite broadcasting in the EMEA region.

The deployment of new television channels and platforms during
the quarter as well as the expansion by clients of existing video services
enabled the Group to record strong development of its video neighbourhoods,
notably as a consequence of Eutelsat's exceptional position in high-growth
video markets in the Second Continent(3).

This growth was mainly driven by:

- The 9degrees East neighbourhood (occupied by EUROBIRD(TM) 9)
which has continued gaining momentum since commercialisation was
initiated in May 2007. With the strong attraction of this
neighbourhood's proximity to Eutelsat's HOT BIRD(TM) neighbourhood at
13degrees East, which broadcasts almost 1,100 channels, EUROBIRD(TM)
9 was broadcasting 115 channels by the end of the first quarter, of
which 15 in High Definition. The new Roots Global platform increased
its offer of channels from the Indian subcontinent for expatriate
audiences in Europe, the Middle East and North Africa. The quarter was
also marked by the launch at the 9degrees East neighbourhood of the
new Russian platform, Platforma HD, for broadcasting to western Russia;

- The 36degrees East neighbourhood (occupied by W4 and SESAT 1)
which, with 419 channels, posted a 36% year-on-year increase in
channels, highlighting the continued strong dynamic of satellite
broadcasting in Russia and Africa;

- The 16degrees East position (occupied by W2) which showed an 11%
increase in channels, with 363 channels broadcasting by 30 September.
Serbia Broadband notably boosted its capacity at this neighbourhood
for its Total TV pay-TV platform in the Balkan markets;

- The 7/8degrees West neighbourhood (ATLANTIC BIRD(TM) 4 and 2)
which registered a 49.2% increase in channels to 276 broadcasting in
North Africa and the Middle East at 30 September 2008.

Eutelsat confirms its leadership for HDTV broadcasting in the
EMEA region, with 63 channels broadcasting at the end of its first quarter.
This represents an increase of 142% in comparison to 30 September 2007 (37
new channels) and of 28.5% in comparison to 30 June 2008 with 14 new
channels. HDTV deployment continues to grow in parallel at Eutelsat's video
neighbourhoods serving Western Europe (24 channels at 30 September 2008) and
neighbourhoods serving the Group's Second Continent (39 channels).

With a fill rate significantly above 90%, Eutelsat confirms
the strong attraction of its video neighbourhoods. This record fill rate
results from the strategy of prioritising in-orbit resources to video and
continued demand for capacity at these neighbourhoods. HOT BIRD(TM) 9 and
W2M, the first satellites in the far-reaching investment programme to be
implemented by the Group over the next 18 months are being prepared for
launch in December 2008. Their commercialisation should begin in the course
of the third quarter of FY 2008-2009. Deployed at 13degrees East, HOT
BIRD(TM) 9 will increase in-orbit sparing at the Group's HOT BIRD(TM)
neighbourhood and enable redeployment of HOT BIRD(TM) 7A to 9 degrees East in
order to bring 18 additional transponders to this neighbourhood. The W2M
satellite will replace W2 and add up to four additional transponders to 16
degrees East.

Data and Value Added Services (18.4% of revenue): 10.3% growth to
41.1 million euros.

Data Services grew by 7.8% to 31.4 million euros, principally
as a result of contracts signed during previous quarters with the London
Satellite Exchange and Telespazio, and more recently, during the quarter with
Horizon Satellite Systems. Data Services notably showed 6.5% sequential
growth compared to the quarter ended June 30, 2008.

Value Added Services, driven by broadband services, posted
strong increase (+19.3% to 9.7 million euros) notably with the performance
of:

- D-STAR(TM)(4) for enterprise markets and local communities posted a
21.3% increase in the number of broadband terminals installed,
which reached 9 484 at 30 September 2008. The 40% share of D-STAR
terminals deployed in Western Europe illustrates the increasing role
played by satellite in broadband markets despite that terrestrial
networks are well developed in that region;

- Tooway(TM)(5), the consumer broadband service launched in 2007,
is now distributed in 15 countries by 23 partners including Numeo and
Sat2way for France and Telecable for Spain. Moreover, Swisscom has
continued to deploy Tooway(TM) terminals in the Ka-band within the
framework of a national programme for broadband access made available
to all homes in Switzerland.

Multi-Usage (7% of revenue): 8% growth to 15.6 million euros.

Revenue from Multi-Usage services is up 8% to 15.6 million
euros. These services benefited from new contracts as well as from renewals
at higher prices of contracts which expired during previous quarters. At a
constant exchange rate, Multi-usage services would have shown a 12% increase.

Other Revenues

Other revenues for the quarter were 3.2 million euros,
including a 1.1 million euro gain related to foreign exchange instruments set
up during the previous fiscal year.

Other Highlights

In October 2008, the SNCF, the French railway operator,
confirmed the successful trials of on-board Internet access and multimedia
services on high-speed TGV trains. This programme, developed by Eutelsat,
Orange, Cap Gemini and Alstom will be extended to all 52 TGV East trains.

Solaris Mobile Ltd., the joint venture company set up by
Eutelsat S.A. and SES Astra, submitted its application to the European
Commission for the use of the S-band for Mobile Satellite Services in the
European Union. With this application, Solaris Mobile confirms its commitment
after the launch in 2009 of Eutelsat's W2A satellite, to providing video and
data services to mobile devices and vehicles as well as professional services
including emergency and environmental monitoring services.

Financial Structure

Given its investment programme, the Group intends to maintain
a solid financial structure with a net debt to EBITDA ratio of 3x to 4x over
the 2008-2011 period.

This target is strengthened by Eutelsat's business model which
offers exceptional long-term visibility on revenue and operating cash flows.
At 30 June 2008 the Group's backlog represented almost four years of annual
revenues.

As of 30 June 2008, the Group's net debt was 2,422 million
euros. Eutelsat has two credit lines, of 1.9 billion euros due in June 2013
and 1.3 billion euros due in November 2011. The Group's debt is largely
hedged against interest rates until the maturity of the credit lines.

As such, the Group's average cost of net debt was 3.87% at June 30, 2008,
after hedging.

Confirmation of 2008-2011 Objectives

Given its operational performance and visibility, the Group reconfirms
the objectives for 2008-2011 which were presented on 31 July 2008. These
objectives include:

- More than 900 million euros of revenue for fiscal year 2008-2009 and a
compound average growth rate of 6% for the period 2008-2011,
accelerating during the period;

- An EBITDA margin maintained consistently above 77% for each fiscal year
2008-2011 and above 78% for 2008-2009;

- An average annual capital expenditure objective of 450 million euros
through 2008-2011;

- An annual pay-out ratio between 50% and 75% of Group share of net
income.

Financial Calendar (Indicative)

- November 6, 2008: General Shareholder Meeting

- February 12, 2009: earnings for the first half ended December 31, 2008.

About Eutelsat Communications

Eutelsat Communications (Euronext Paris: ETL, ISIN code: FR0010221234) is
the holding company of Eutelsat S.A.. With capacity commercialised on 24
satellites that provide coverage over the entire European continent, as well
as the Middle East, Africa, India and significant parts of Asia and the
Americas, Eutelsat is one of the world's three leading satellite operators in
terms of revenues. At 30 September 2008, Eutelsat's satellites were
broadcasting more than 3,180 television channels and 1,100 radio stations.
Almost 1,100 channels broadcast via its HOT BIRD(TM) video neighbourhood at
13 degrees East which serves over 120 million cable and satellite homes in
Europe, the Middle East and North Africa. The Group's satellites also serve a
wide range of fixed and mobile telecommunications services, TV contribution
markets, corporate networks, and broadband markets for Internet Service
Providers and for transport, maritime and in-flight markets. Eutelsat's
broadband subsidiary, Skylogic, markets and operates services through its
teleport in Italy that serves enterprises, local communities, government
agencies and aid organisations in Europe, Africa, Asia and the Americas.
Headquartered in Paris, Eutelsat and its subsidiaries employ 538 commercial,
technical and operational experts from 27 countries.

http://www.eutelsat.com

Annexe

Revenue breakdown by business application excluding other
revenues(6).

As of September 30 2007 2008

Application Services 75.4% 74.6%
Data and Value Added Services 17.7% 18.4%
Data Services 13.9% 14.0%
Value Added Services 3.9% 4.4%
Multi-usage 6.9% 7.0%
Total 100.0% 100.0%

Number of channels broadcast by Eutelsat's fleet

Change over 1 year
As of September 30 2007 2008 In units In %

Premium video neighbourhoods(7) 1,390 1,414 +24 +1.7%
Major video neighbourhoods(8) 1,204 1,597 +393 +35.3%
Other orbital positions(9) 139 169 +30 +21.6%
Total 2,733 3,180 +447 +16.4%

Satellite Launch Schedule

Satellite Estimated launch period Transponders

HOT BIRD(TM) 9 December 2008 64 Ku
W2M December 2008 26 Ku
HOT BIRD(TM) 10 Jan./ March 2009 64 Ku
W2A Jan./ March 2009 46 Ku /10C / S band
W7 June/ August 2009 70 Ku
KA-SAT Mid-2010 > 80 beams Ka
W3B Mid-2010 53 Ku / 3 Ka

Note: Satellites are usually operational between one and two months after
launch.

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(1) At a constant exchange rate, revenue growth would have been 7.5%
compared with the first quarter of the previous fiscal year

(2) Europe, Middle East, Africa

(3) Central and eastern Europe, Russia, Middle East, North Africa and
Sub-Saharan Africa

(4) The D- STAR service provides Internet access and Virtual Private
Networks to enterprises and institutions in regions with inexistent or
unreliable terrestrial broadband infrastructure.

(5) The TOOWAY(TM) service, both in Ka-band and Ku-band, provides
broadband access to households located at the edge of terrestrial networks.

(6) Excluding other revenues and non-recurring revenues of 2M EUR at 30
September 2007 and 3.2M EUR at 30 September 2008.

(7) HOT BIRD(TM) at 13 degrees East (Europe) and EUROBIRD(TM) 1 at 28.5
degrees East (United Kingdom & Ireland).

(8) 7/8 degrees West (Middle East, North Africa), 5 degrees West (France,
North Africa and Sub-Saharan Africa), 7 degrees East (Turkey), 9 degrees East
(Western and Central Europe), 16 degrees East (Eastern Europe and Balkans),
25.5 degrees East (Middle East) and 36 degrees East (Russia, Africa).

(9) Used for video contributions and professional video networks.

For further information

Press:

Vanessa O'Connor
Tel: +33-1-53-98-38-88
voconnor@eutelsat.fr

Frederique Gautier
Tel: +33-1-53-98-38-88
fgautier@eutelsat.fr

Investors:

Gilles Janvier
Tel: +33-1-53-98-35-30
investors@eutelsat-communications.com

Source: Eutelsat Communications

Press: Vanessa O'Connor, Tel: +33-1-53-98-38-88, voconnor@eutelsat.fr; Frederique Gautier, Tel: +33-1-53-98-38-88, fgautier@eutelsat.fr; Investors: Gilles Janvier, Tel: +33-1-53-98-35-30, investors@eutelsat-communications.com

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